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las3ification   of  accounts 
for   electrical  utilities 


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and  utilities    conimissioners 


■7;'*si:-s»  i«j;-i  ^jSP^ 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


NATIONAL  ASSOCIATION 

OF  RAILWAY  AND  UTILITIES 

COMMISSIONERS 


Uniform  Classification 

of  Accounts  for 

Electrical  Utilities 


Prepared  by 

Committee  on  Statistics  and  Acconnts  of 
Public  Utilities  and  Recommended  for 
Adoption  by  State  Commissions  at  the 
Annual  Meeting  of  the  National  Association 
of  Railway  and  Utilities  Commissioners 
lield   in    Detroit,    Mich.,    November,    1922. 


NATIONAL  ASSOCIATION 

OF  RAILWAY  AND  UTILITIES 

COMMISSIONERS 


Uniform  Classification 

of  Accounts  for 

Electrical  Utilities 


■^2J1 


Prepared  by 

Committee  on  Statistics  and  Accounts  of 
Public  Utilities  and  Recommended  for 
Adoption  by  State  Commissions  at  the 
Annual  Meeting  of  the  National  Association 
of  Railway  and  Utilities  Commissioners 
held  in  Detroit,  Mich., 
November,   1922 


Published  by 
THE  STATE  LAW  REPORTING  COMPANY 

New  York 


Revision  of  1922 
Reprint  J9J3 


COPYRIGHT,    1922 

IIY     THE 


NATIONAL  ASSOCIATION  OF  RAILWAY  AND  UTILITIES  COMMISSIONERS 

.-ill    Rights   Reserved 


CONTENTS 


PAGE 

General   Instructions    1 

Balance  Sheet  Accounts 2 

General  Instructions  and  Definitions 4 

Text  Pertaining  to  Balance  Sheet  Accounts 9 

Fixed  Capital  Accounts  (List) 28 

General  Instructions  and  Definitions 30 

Text  Pertaining  to  Fixed  Gapital  Accounts 35 

Income  Accounts  (List) 54 

General  Instructions  and  Definitions 56 

Text  Pertaining  to  Income  Accounts 59 

Profit  and  Loss  Accounts  (List) "66 

General  Instructions  and  Definitions 67 

Text  Pertaining  to  Profit  and  Loss  Accounts 68 

Operating  Revenue  Accounts  (List) 70 

General  Instructions  and  Definitions 71 

Text  Pertaining  to  Operating  Revenue  Accounts 7^ 

Operating  Expense  Accounts  (List) 76 

General  Instructions  and  Definitions 82 

Text  Pertaining  to  Operating  Expense  Accounts 86 


560S00 

^*'Mli^999  Idminlstratlon 


UNIFORM  CLASSIFICATION  OF  ACCOUNTS  FOR 
ELECTRICAL  UTILITIES 

GENERAL  INSTRUCTIONS 

1.  Accounts  to  be  Kept  by  Double  Entry  Method. 

All  the  accounts  (other  than  purely  statistical  accounts)  defined  in 
this  classification  must  be  kept  by  the  double  entry  method. 

2.  Account  Numbers  Not  a  Paxt  of  Title. 

The  numbers  prefixed  to  account  titles  in  this  classification  are 
solely  for  convenience  of  reference  and  are  not  part  of  the  titles  or 
definitions. 

3.  Accounting  Period. 

It  is  recommended  that  each  electrical  corporation  select  the  month 
as  its  accounting  period  and  that  it  make  its  bookkeeping  entries  on 
a  monthly  basis.  It  may,  however,  select  a  quarterly  or  other  basis 
if  that  will  better  meet  the  conditions  under  which  it  conducts  its 
business.  Each  corporation  will  be  required  to  close  its  books  at  the 
end  of  the  fiscal  year  for  which  it  makes  its  annual  report. 

4.  Records. 

Each  electrical  corporation  shall  so  keep  its  general  accounting  books 
and  all  other  books  and  records  which  support  in  any  way  the  entries 
to  such  accounting  books  that  it  can  furnish  at  any  time  full  infor- 
mation as  to  any  account  kept  by  it.  Moreover,  it  shall  support  each 
entry  to  each  account  with  such  detailed  information  as  will  enable 
a  ready  identification  and  verification  of  the  facts  recorded  therein. 

The  books  referred  to  herein  include  not  only  books  of  account  in  a 
limited  technical  sense  but  all  other  records  such  as  minute  books, 
stock  books,  etc.,  which  will  be  useful  in  developing  the  history  of  any 
of  the  accounting  company's  transactions. 


BALANCE    SHEET    ACCOUNTS 


STANDARD  FORM  OF  BALANCE  SHEET 
Assets  and  Other  Debits 
101.     Fixed  capital 

Current  Assets: 

111.  Cash 

112.  Notes  receivable 

113.  Accounts  receivable 

114.  Interest  and  dividends  receivable 

115.  Marketable  securities 

116.  Materials  and  supplies 

117.  Prepayments 

118.  Subscribers  to  capital  stock 

119.  Miscellaneous  current  assets 

Miscellaneous  Assets: 

121.  Investments  in  affiliated  companies 

122.  Miscellaneous  investments 

123.  Sinking  funds 

124.  Replacement  fund 

125.  Miscellaneous  special  funds 

126.  Special  deposits 

Suspense : 

131.  Unamortized  debt  discount  and  expense 

132.  Property  abandoned 

133.  Jobbing  accounts 

134.  Clearing  or  apportionment  accounts 

135.  Work  in  progress 

136.  Miscellaneous  suspense 

Adjustment  Accounts: 

141.  Discount  on  capital  stock 

142.  Reacquired  securities 

143.  Treasury  securities 

150.     Profit  and  loss — deficit 


BALANCE    SHEET    ACCOUNTS 


STANDARD  FORM  OF  BALANCE  SHEET 
Liabilities  and  Other  Credits 

201.  Capital  stock 

202.  Premium  on  capital  stock 

203.  Capital  stock  subscribed 

211.  Long  term  debt 

212.  Receiver's  certificates 

Current  Liabilities: 

221.  Notes  payable 

222.  Accounts  payable 

223.  Consumers'  deposits 

224.  Alatured  interest  unpaid 

225.  Dividends  declared 

226.  Matured  long  term  debt  unpaid 

227.  Miscellaneous  current  liabilities 

Accrued  Liabilities: 

231.  Taxes  accrued 

232.  Interest  accrued 

233.  Miscellaneous  accrued  liabilities 

241.     Advances  from  affiliated  companies 

Reserves : 

251.  Retirement  reserve 

252.  Casualty  and  insurance  reserve 

253.  Unamortized  premium  on  debt 

254.  Sinking  fund  reserves 

255.  Contributions  for  extensions 

256.  Contingency  reserve 

257.  Miscellaneous  reserves 

261.     Miscellaneous  unadjusted  credits 
270.     Profit  and  loss — surplus 


4  BALANCE    SHEET    ACCOUNTS 


BALANCE  SHEET  ACCOUNTS 

General  Instnictions  and  Definitions 

1.  Balance  Sheet  Accounts  Defined. 

By  balance  sheet  accounts  are  meant  those  titles  under  which  the 
ledger  accounts  are  combined  and  summarized  to  show  the  assets, 
liabilities  and  surplus  or  deficit  of  an  enterprise  at  a  given  time.  Where 
the  title  and  definition  of  a  balance  sheet  account  clearly  indicate  that 
it  is  a  summary  of  other  accounts,  it  is  not  required  that  a  special 
ledger  account  shall  be  raised  under  such  title  to  include  the  balances 
from  the  accounts  usually  carried  on  the  ledger. 

2.  Form  of  Balance  Sheet. 

The  standard  form  of  balance  sheet  is  shown  on  pages  2  and  3. 
Certain  of  the  terms  there  used  are  defined,  for  the  sake  of  greater 
clearness,  in  the  following  paragraphs. 

3.  Current  Assets. 

Current  assets  are  those  assets  that  are  readily  converted  into 
money  or  capable  (in  the  case  of  materials  and  supplies)  of  being  used 
in  operation  or  construction. 

4.  Investments. 

Investment  represents  the  relatively  permanent  employment  of 
property  for  the  purpose  of  directly  or  indirectly  producing  revenue. 
Investment  in  permanent  assets  devoted  to  the  undertakings  for 
which  the  accounting  company  is  primarily  organized  is  called  fixed 
capital  investment  or  simply  fixed  capital.  Property  in  the  form  of 
assets  necessary  to  the  conduct  of  the  accounting  company's  opera- 
tions of  which  the  individual  items  are  subject  to  frequent  change 
is  sometimes  said  to  represent  an  investment  in  workincj  capital. 
Investments  may  also  be  of  property  segregated  in  special  funds;  of 
property  devoted  to  the  use  of  affiliated  corporations;  or  of  property 
not  devoted  to  the  undertakings  for  which  the  accounting  company  is 
primarily  organized,  as  more  specifically  defined  in  accoimt  No.  122, 
"  Miscellaneous  Investments,"  which  see.  Encumbered  investments  are 
those  held  subject  to  a  lien  or  other  encumbrance  of  some  character. 
Unencumbered  investments  are  those  held  free  of  all  encumbrances. 


BALANCE    SHEET    ACCOUNTS  D 

5.  Funds. 

Funds  are  assets,  usually  those  capable  of  ready  conversion  into 
cash,  set  aside  in  the  hands  of  trustees  or  otherwise  restricted  to 
specific  uses. 

6.  Suspense  Accounts. 

Suspense  accounts  are  accounts  in  which  may  be  carried  any  ex- 
penditure the  appropriate  disposition  of  which  is  not  yet  determined, 
or  any  loss  which  may  properly  be  spread  over  a  period  of  time,  or 
any  other  debit  which  may  be  amortized  through  charges  made  to 
expense  or  other  income  accounts  at  intervals  over  a  period  of  time; 
credit  items,  the  final  disposition  of  which  is  not  yet  determined,  may 
also  be  carried  in  suspense  under  account  No.  261,  "  Miscellaneous 
Unadjusted  Credits." 

7.  Adjustment  Accounts. 

Adjustment  accounts  are  accounts  in  which  may  be  carried  debits 
that  ofifset  certain  liabilities  but  which  it  is  not  desirable,  as  a  matter 
of  bookkeeping  convenience,  to  charge  against  the  liability  accounts 
concerned. 

8.  Current  Liabilities. 

Current  liabilities  are  those  which  are  definitely  determined  in 
amount  and  are  either  matured  at  the  date  of  the  balance  sheet  or 
become  due  within  a  year  from  date  or  upon  demand  of  the  creditor. 

9.  Accrued  Liabilities. 

Accrued  liabilities  are  those  not  yet  due,  but  which  are  to  become 
due  in  the  near  future  and  which  accrue  or  grow  from  day  to  dav. 
such  as  unmatured  interest,  rents,  taxes,  etc.  Credits  to  accounts 
representing  accrued  liabilities  whose  amounts  are  not  definitely 
known,  as  in  the  case  of  many  taxes,  are  made  on  the  basis  of  esti- 
mates which  are  adjusted  when  the  proper  amounts  become  known. 

10.  Reserves. 

Reserves  are  credit  accounts  created  through  arbitrary  or  estimated 
charges  made  to  provide  wholly  or  in  part  for  matters  to  be  later 
determined. 

11.  Discount  and  Premium  on  Capital  3tock. 

Ledger  accounts  shall  be  provided  to  cover  the  discounts  and 
premiums  on  each  class  of  capital  stock  issued  or  assumed  by  the 
accounting  company.     The  total  of  the  net  debit  balances  remaining 


6  BALANCE    SHEET    ACCOUNTS 

in  these  several  accounts  shall  be  included  in  account  No.  141,  "Dis- 
count on  Capital  Stock,"  and  the  total  of  the  net  credit  balances  in 
account  No.  202,  "  Premium  on  Capital  Stock." 

By  the  term  discount  is  meant  the  excess  of  the  par  value  of  stocks 
actually  issued  or  assumed  (and  accrued  dividends,  if  any,  expressed 
in  the  contract  of  sale)  over  the  actual  cash  value  of  the  consideration 
received  for  such  stocks.  By  the  term  premium  is  meant  the  excess  of 
the  actual  cash  value  of  the  consideration  received  for  stock  issued  or 
assumed  over  the  par  value  of  such  stock  (and  accrued  dividends, 
if  any). 

Entries  in  these  accounts  representing  discounts  shall  be  carried 
therein  until  offset  (1)  by  premiums  realized  on  subsequent  sales  of 
the  same  class  ofv  stock,  (2)  by  assessments  levied  on  the  stockholders, 
(3)  by  appropriations  from  surplus  for  that  purpose,  or  (4)  by  charges 
to  Profit  and  Loss  upon  reacquirement  of  the  stock.  Entries  in  these 
accounts  representing  premiums  realized  shall  be  carried  therein  until 
ofifset  (1)  by  discount  suffered  on  sales  of  the  same  class  of  stock,  or 
(2)  by  credits  to  Profit  and  Loss  upon  reacquirement  of  the  stock.  In 
case  the  accounting  company  is  permitted  and  elects  to  distribute  all 
or  any  part  of  the  net  premium  on  its  capital  stock  to  its  stockholders, 
the  amount  thus  distributed  shall  be  charged  to  the  premium  account. 

For  the  purpose  of  this  classification  the  premium  realized  at  the  sale 
of  capital  stock  shall  not  be  considered  a  profit  and  loss  item  except 
upon  reacquirement  of  the  stock  sold. 

In  no  case  shall  discount  on  capital  stock  be  charged  to  or  included 
in  any  account  as  a  part  of  the  cost  of  acquiring  any  property,  tangible 
or  intangible,  or  as  a  part  of  the  cost  of  operation. 

When  stock  which  has  been  issued  or  assumed  by  the  accounting 
company  is  reacquired,  the  difference  between  the  price  paid  and  the 
par  value  of  the  stock  shall  be  charged  or  credited  to  Profit  and  Loss 
as  may  be  appropriate.  Concurrently  the  premium  or  discount  account 
for  the  particular  issue  of  stock  reacquired  shall  be  adjusted  through 
Profit  and  Loss  to  the  extent  of  the  premium  or  discount  applicable 
to  the  shares  reacquired.  This  does  not  apply  to  the  purchase  of 
securities  solely  for  special  funds  in  which  the  accounting  company 
carries  at  cost  instead  of  par  value  securities  issued  or  assumed  by 
itself. 

In  case  the  premium  or  discount  realized  at  the  prior  sale  of  the 
stock  reacquired  has  been  included  in  an  asset  account  other  than  the 
premium  and  discount  account,  such  asset  account  shall  be  concur- 
rently adjusted  through  Profit  and  Loss  to  the  extent  of  the  premium 


BALANCE    SHEET    ACCOUNTS  / 

or   discount    previously    included    therein    with    respect   to   the    shares 
reacquired. 

12.    Discount,  Expense  and  Premium  on  Long-  Term  Debt. 

Ledger  accounts  shall  be  provided  to  cover  discounts,  expense  and 
premiums  at  the  sale  of  each  class  of  long-term  debt  (including  re- 
ceiver's certificates)  issued  or  assumed  by  the  accounting  company. 
The  total  of  the  net  debit  balances  remaining  in  these  several  accounts 
shall  be  included  in  account  Xo.  131,  "  Unamortized  Debt  Discount 
and  Expense,"  and  the  total  of  the  net  credit  balances  in  account  No. 
253,  "  Unamortized  Premium  on  Debt." 

By  the  term  discount  is  meant  the  excess  of  the  par  value  of  the 
securities  issued  or  assumed  and  the  accrued  interest  thereon,  over  the 
actual  cash  value  of  the  consideration  received  for  such  securities.  By 
the  term  premium  is  meant  the  excess  of  the  actual  cash  value  of  the 
consideration  received  for  securities  issued  or  assumed  over  the  par 
value  of  such  securities  and  the  accrued  interest  thereon. 

By  the  term  expense  are  meant  all  expenses  in  connection  with  the 
issue  and  initial  sale  of  evidences  of  debt,  such  as  fees  for  drafting 
mortgages  and  trust  deeds;  fees  and  taxes  for  issuing  or  recording 
mortgages  and  trust  deeds;  cost  of  printing  bonds,  certificates  of  in- 
debtedness, and  other  commercial  paper  having  life  of  more  than  one 
year ;  fees  paid  trustees  acting  under  mortgages  and  trust  deeds ;  fees 
paid  for  legal  services  to  trustees  relative  to  mortgage  securities ;  fees 
and  commissions  paid  underwriters  and  brokers  for  marketing  such 
evidences  of  debt ;   and  other  like  expense. 

Each  month  (or  other  accounting  period)  there  shall  be  charged  to 
income  account  "Amortization  of  Debt  Discount  and  Expense "  a 
proportion  (based  upon  the  ratio  of  such  fiscal  period  to  the  remaining 
life  of  the  respective  securities)  of  each  of  the  debit  balances  in  these 
accounts,  and  correspondingly  there  shall  be  credited  to  income  ac- 
count "Amortization  of  Premium  on  Debt  "  a  similar  proportion  of 
each  of  the  credit  balances  in  these  accounts. 

When  any  long  term  debt  which  has  been  actually  issued  to  bo>ia 
fide  holders  for  value  is  reacquired  by  the  accounting  company,  a  pro- 
portion of  the  balance  remaining  in  the  accounts  covering  discount, 
expense,  and  premium  on  long  term  debt  of  the  class  of  security  re- 
acquired shall  be  credited  or  charged,  as  may  be  appropriate,  to  Profit 
and  Loss.  Such  proportion  shall  be  based  upon  the  ratio  of  the  par 
value  of  the  security  reacquired  to  the  par  value  of  all  the  securities 
of  the  same  class  actually  outstanding  immediately  before  such  re- 
acquirement.     This  does  not  apply  to  the  purchase  of  securities  solely 


8  BALANCE    SHEET    ACCOUNTS 

for  special  funds  in  which  the  accounting  company  carries  at  cost  in- 
stead of  par  value  securities  issued  or  assumed  by  itself. 

In  case,  however,  the  premium  or  discount  realized  at  the  prior  sale 
of  the  securities  reacquired  has  been  included  (in  excess  of  the  propor- 
tion authorized  in  the  text  of  fixed  capital  account  No.  355,  "  Interest 
during  Construction ")  in  an  asset  account  other  than  the  premium 
account,  such  asset  account  shall  be  concurrently  adjusted  through 
Profit  and  Loss  to  the  extent  of  such  excess  of  the  premium  or  discount 
previously  included  therein  with  respect  to  the  securities   reacquired. 

Except  as  provided  in  account  No.  355,  "  Interest  during  Construc- 
tion," no  discount  on  long  term  debt  shall  be  charged  to  or  included  in 
any  account  as  a  part  of  the  cost  of  acquiring  any  property,  tangible 
or  intangible,  or  as  a  part  of  the  cost  of  operation. 

13.    Contingent  Assets  and  Liabilities. 

Contingent  assets  and  liabilities  shall  not  be  included  in  the  body  of 
the  balance  sheet  statement.  Whenever  the  balance  sheet  is  stated, 
however,  contingent  assets  and  liabilities,  if  any,  should  be  shown  in 
detail  in  a  supplementary  statement.  Contingent  assets  represent 
possible  sources  of  value  contingent  upon  the  fulfilment  of  conditions 
regarded  as  uncertain.  Contingent  liabilities  include  items  which  may, 
under  certain  conditions,  become  obligations  of  the  company,  but  are 
neither  direct  nor  assumed  obligations  at  the  date  of  the  balance 
sheet. 


BALANCE   SHEET    ACCOUNTS 


TEXT  PERTAINING  TO  BALANCE  SHEET 
ACCOUNTS 

101.    Fixed  Capital. 

This  account  shall  include  the  cost  of  property  having  an  expecta- 
tion of  life  in  service  of  more  than  one  year  which  is  devoted  to  the 
operations  conducted  by  the  accounting  company,  less  deductions  for 
property  abandoned,  sold,  or  otherwise  retired. 

Separate  subdivisions  shall  be  used  for  each  distinct  class  of  opera- 
tions conducted  by  the  accounting  company,  as,  for  example,  "  Fixed 
Capital — electric,"  '"  Fixed  Capital — gas."  If,  however,  the  account- 
ing company  conducts  two  or  more  separate  and  distinct  classes  of 
operations,  as  in  the  case  of  a  company  having  both  an  electric  and 
gas  department,  expenditures  chargeable  to  such  fixed  capital  accounts 
as  "  Land,"  "  Organization,"  "  General  Structures,"  "  Engineering  and 
Superintendence,"  etc.,  which  are  not  assignable  to  a  particular  de- 
partment or  kind  of  operations,  may  be  shown  in  a  subdivision  having 
the  title  "  Fixed  Capital — general."  The  foregoing  shall  not  be  con- 
strued to  prohibit  the  apportionment  of  such  exiDenditures  between 
departments  on  a  more  or  less  arbitrary  basis  provided  this  basis  is 
clearly  stated  in  the  accounting  company's  public  reports. 

111.  Cash. 

This  account  shall  include  all  money  coming  into  the  possession  of 
the  accounting  company  in  which  it  has  a  beneficial  interest.  This 
covers  coin  of  the  United  States,  United  States  treasury  notes,  gold 
and  silver  certificates  and  greenbacks,  and  bank  bills  payable  to  bearer 
on  demand;  also  all  bank  credits,  checks  and  drafts  receivable  subject 
to  satisfaction  or  transfer  upon  demand  (whether  payable  to  bearer  or 
to  order). 

112.  Notes  Receivable. 

This  account  shall  include  the  ledger  value  of  all  notes  and  bills 
receivable  which  are  the  projjcrty  of  the  accounting  company  and  upon 
which  solvent  concerns  or  individuals  are  liable.  This  covers  demand 
notes,  drafts,  etc.,  issued  by  others  than  banks,  and  time  notes,  drafts, 
etc..  bv  whomever  issued.  This  account  does  not  include  notes  coming 
within  the  definition  of  "  Investments  in  Affiliated  Companies "  or 
"Miscellaneous  Investments"   (for  which  see  page  13). 


10  BALANCE    SHEET    ACCOUNTS 

113.  Accounts  Receivable. 

This  account  shall  include  all  amounts  (other  than  deposits  in  banks) 
owing  to  the  accounting  company  upon  o[)en  book  accounts  with  sol- 
vent concerns  and  individuals;  also  the  ledger  value  of  all  accounts 
and  claims  upon  which  responsibility  is  acknowledged  by  solvent  con- 
cerns and  individuals  or  which  are  sufficiently  secured  to  be  considered 
good  and  of  all  judgments  against  such  concerns  where  the  judgment 
is  not  appealable  or  suspended  through  appeal.  This  account  does 
not  include  negotiables. 

Note  A. — The  record  of  accounts  receivable  shall  be  kept  in  such  manner  as 
to  permit  the  ready  segregation  of  the  three  groups,  consumers'  accounts,  accounts 
with  affiliated  companies,  and  miscellaneous  accounts  receivable. 

Note  B. — It  is  suggested  that,  when  practicable,  consumers'  accounts  be  further 
classified  into  current  month  accounts,  accounts  more  than  one  month  but  less 
than  one  year  old,  and  accounts  over  one  year  old. 

114.  Interest  and  Dividends  Receivable. 

This  account  shall  include  the  amount  of  interest  accrued  to  the 
date  of  the  balance  sheet  on  funded  and  unfunded  securities,  loans, 
open  accounts,  mortgages  and  deposits  held  by  or  for  the  accounting 
company;  dividends  declared  on  stocks  similarly  held,  and  dividends, 
accrued  on  stocks  when  contracts  require  that  the  dividend  be  paid  at 
stated  times. 

Note. — No  amount  representing  interest  or  dividends  receivable  shall  be  in- 
cluded in  this  account  unless  its  payment  is  reasonably  assured  by  past  experience, 
anticipated  provision,  or  otherwise.  But  the  definition  of  this  account  should 
not  be  construed  to  prevent  the  carrying  of  interest  and  dividends  receivable  in  a 
suspense  account  until  collection  has  actually  been  made,  even  though  the  debtor 
be  considered  to  be  solvent. 

115.  Marketable  Securities. 

This  account  shall  include  the  cost  or  book  value  of  marketable 
securities  (other  than  those  issued  or  assumed  by  the  accounting  com- 
pany) held  in  its  treasury  unpledged  and  free  for  sale  and  not  neces- 
sary or  desirable  for  it  to  hold  for  the  purpose  of  maintaining  the 
integrity  of  its  business  or  operations.  Securities  which  may  not 
readily  be  sold  at  their  fair  value  should  be  classed  as  "  miscellaneous 
investments  "  and  included  in  Account  No.  122,  "  Miscellaneous  In- 
vestments." 

Records  shall  be  kept  which  will  ])ermit  ready  analysis  of  the  balance 
in  this  account  as  between  : 

(a)  Stocks. 

(b)  Bonds. 

(c)  Long  term  notes  (not  classifiable  as  "  Notes  Receivable  "  prop- 
erly includible  iti  Account  No.   112,  "Notes  Receivable"). 

(d)  Miscellaneous. 


BALANCE    SHEET    ACCOUNTS  11 

116.    Materials  and  Supplies. 

This  account  shall  include  the  balances  representing  the  cost  (in- 
cluding transportation,  insurance  and  inspection  charges,  customs 
duties,  etc.)  of  all  materials  and  supplies  not  charged  out  in  the 
accounting  company's  accounts,  regardless  of  whether  the  same  are  in- 
tended to  be  consumed  in  construction  or  in  operation  or  later  to  be 
sold.  Trade  or  cash  discounts  allowed  in  connection  with  the  purchase 
or  the  payments  for  materials  and  supplies  shall  be  credited  to  the 
particular  bills  on  which  such  discounts  are  allowed  or  to  clearing  ac- 
count "  Stores  Department  "  when  not  practicable  to  credit  the  par- 
ticular bills. 

The  cost  of  materials  and  supplies  includes  all  specifically  assign- 
able transportation  charges  incurred  in  obtaining  the  delivery  of  such 
materials  and  supplies  upon  the  premises  of  the  purchaser  and  the 
cost  of  any  special  tests  made  thereon  prior  to  their  acceptance. 

When  any  materials  or  supplies  the  cost  of  which  has  been  charged 
to  this  account  are  issued  for  use,  the  amount  at  which  they  stand 
charged  herein  should  be  credited  to  this  account  and  charged  to  the 
proper  construction,  operating  expense  or  other  account. 

The  scrap  or  salvage  value  of  things  retired  from  service  shall  be 
charged  to  appropriate  sub-accounts  in  this  account  while  such  things 
remain  the  property  of  the  accounting  company;  if  such  salvage  value 
is  not  known  and  cannot  be  determined  it  shall  be  estimated. 

Inventories  of  supplies  and  materials  shall  be  taken  at  least  an- 
nually, and  any  shortage  or  overage  disclosed  by  such  inventories 
shall  be  credited  or  debited  to  this  account  and  concurrently  debited 
or  credited  to  operating  expense,  fixed  capital  or  other  appropriate 
accounts. 

Note  A. — It  is  not  required  that  the  transportation  and  other  elements  of  cost 
shall  be  assigned  with  a  greater  degree  of  accuracy  than  to  the  nearest  cent  per 
unit  of  materials  and  supplies.  Where  a  single  transportation  item  covers  a  multi- 
tude of  things  the  portion  of  the  expense  not  assigned  to  specific  things  should  be 
charged  to  the  clearing  account  "  Stores  Department." 

Note  B. — If  an  appliance  sold  is  for  any  reason  returned  to  the  accounting  com- 
pany it  should  be  charged  to  the  appropriate  sub-account  at  its  appraised  value. 
Cost  of  repairing  or  renovating  it  should  be  charged  to  the  same  sub-account.  Appro- 
priate adjustments  should  be  made  in  accounts  credited  with  the  original  sale. 

117.    Prepayments. 

This  account  shall  include  the  debit  balances  described  under  the 
following  sub-heads : 

a.  Prepaid  Taxes.  The  excess  of  taxes  paid  over  the  amount 
properly   chargeable   to    current   income   or   other   similar   account,   as 


12  BALANCE    SHEET    ACCOUNTS 

shown  by  a  debit  balance  in  the  liabiHty  account.    (See  account  No.  231, 
"  Taxes  Accrued,"  page  22.) 

b.  Prepaid  Rents,  The  amount  of  rents  paid  in  advance  of  the 
enjoyment  of  the  term.  As  the  term  is  consumed,  this  account  shall 
be  credited  at  regular  accounting  intervals  and  the  appropriate  rent 
account  debited  with  the  amount  applicable  to  the  i>eriod, 

C.  Prepaid  Insurance.  The  amount  of  premiums  on  insurance 
policies  paid  in  advance  of  their  accrual.  As  such  premiums  accrue 
they  should  be  credited  at  regular  accounting  intervals  to  this  account 
and  charged  to  the  appropriate  oj^erating  expense  or  other  account. 

d.  Miscellaneous  Prepayments.  Prepayments  made  for  any 
purpose  other  than  as  provided  for  in  the  three  preceding  heads. 

Note. — By  the  accrual  of  insurance,  rents,  etc.,  is  meant  their  accumulation 
when  considered  as  spread  uniformly  over  the  period  to  which  they  apply.  Thus, 
if  the  rent  fixed  by  contract  of  lease  for  a  certain  property  is  $600  for  a  calendar 
year,  this  accrues  at  the  rate  of  $50  each  month  (unless  it  is  desired  to  base  the 
accruals  on  days,  when  the  varying  lengths  of  the  months  would  require  to  be  con- 
sidered), regardless  of  the  actual  times  when  the  rent  matures;  $50  should  thus  (if 
the  rent  has  been  prepaid)  be  credited  each  month  to  the  sub-account  "Prepaid 
Rents "  and  concurrently  charged  to  the  appropriate  account  in  the  "  Income " 
account.     Similarly  in  the  case  of  other  prepayments. 

118.  Subscribers  to  Capital  Stock. 

This  account  shall  be  charged  with  subscriptions  received  for  capital 
stock.  The  amount  expressed  in  the  entry  charging  this  account  shall 
be  determined  in  accordance  with  the  subscription  agreement.  Con- 
currently, there  shall  be  credited  to  account  No.  203,  "  Capital  Stock 
Subscribed,"  an  amount  representing  the  stock  subscribed  as  stipu- 
lated in  the  subscription  agreement.  Payments  received  from  sub- 
scribers shall  be  credited  to  this  account. 

119.  Miscellaneous  Current  Assets. 

This  account  shall  include  the  cost  of  all  current  assets  which  are 
not  includible  under  any  of  the  foregoing  accounts.  (See  "Balance 
Sheet  Accounts — General  Instructions  and  Definitions,"  Section  3, 
page  4.) 

121.    Investments  in  Affiliated  Companies. 

This  account  shall  include  the  ledger  value  of  the  accounting  com- 
pany's investment  in  securities  or  non-negotiable  notes  issued  or  as- 
simned  by  affiliated  companies;  also  of  its  investment  advances  to  such 
companies.  Two  companies  are  affiliated  if  either  one  controls  the 
policy  of  the  other  or  if  both  arc  subject  to,  the  same  control.  P>y 
"  Investment   advances  "   are  meant   debit   balances   in   open  accounts 


BALANCE    SHEET    ACCOUNTS  13 

with  affiliated  companies  not  subject  to  current  settlement  and  inter- 
est accrued  on  such  o^^en  accounts  when  such  interest  is  not  subject  to 
current  settlement.    This  account  shall  be  subdivided  as  follows : 

a.  Stocks. 

b.  Bonds. 

c.  Notes. 

d.  Advances. 

Note  A. — Accounts  with  affiliated  companies  wliich  are  subject  to  current 
settlement  such  as  charges  for  materials  and  supplies  currently  furnished,  charges 
for  repairs  to  equipment,  etc.,  shall  be  classed  as  current  assets  or  current 
liabilities  as  may  be  appropriate. 

Note  B. — Securities  borrowed  by  the  accounting  company  and  pledged  should 
not  be  included  in  this  account. 

Note  C. — Securities  pledged  for  purposes  other  than  that  of  security  for  long 
or  short  term  debt  of  the  accounting  company  should  be  included  in  account 
No.  123,  "Sinking  Funds";  account  No.  124,  "Replacement  Fund";  account  No. 
125,  "  Miscellaneous  Special  Funds  " ;  or  account  No.  126,  "  Special  Deposits  "  as 
may  be  appropriate. 

122.  Miscellaneous  Investments. 

This  account  shall  include  the  balances  in  accoimts  representing  mis- 
cellaneous investments  such  as  those  in  securities  of  non-affiliated  cor- 
porations, in  tangible  property  of  a  i>ermanent  nature  not  coming 
within  the  definition  of  fixed  capital,  as,  for  example,  real  estate  leased 
to  others  or  held  for  a  rise  in  value,  etc.,  provided  such  investments 
are  not  included  in  any  special  fund  account. 

The  accounting  company's  records  shall  be  kept  in  such  manner  as 
to  permit  the  ready  analysis  of  this  account  to  show  separately  in  the 
company's  annual  reports  full  particulars  concerning  its  investments 
of  any  given  class,  including  the  ledger  value  of  those  which  are  held 
subject  to  a  mortgage,  pledge,  or  other  lien. 

123.  Sinking-  Funds. 

This  account  shall  include  the  amount  of  cash,  the  ledger  value  of 
securities  of  other  companies,  and  other  assets  which  are  held  by 
trustees  of  sinking  funds  for  the  purpose  of  redeeming  outstanding 
obligations,  including  such  assets  so  held  by  the  accounting  company 
when  they  are  segregated  in  a  distinct  fund;  also  amounts  deposited 
with  such  trustees  on  account  of  mortgaged  property  sold,  when  the 
proceeds  of  such  sale  are  to  be  held  for  the  redemption  of  securities ; 
and  the  cost  of  live  securities  issued  or  assumed  by  the  accounting 
company  and  held  in  such  funds.  A  separate  account  shall  be  kept 
for  each  fund  and  the  title  of  each  fund  should  designate  the  obliga- 
tion in  support  of  which  the  fund  is  created. 

Note. — Should  the  constituents  of  a  sinking  fund  change  substantially  in  value, 
and  such  change  seem  likely  to  be  permanent,  it  may  be  reflected  by  suitable  entries 


14  BALANCE    SHEET    ACCOUNTS 

in  this  account  and  in  the  corresponding  reserve  account  or  in  "  Profit  and  Loss  " 
as  may  be  appropriate. 

124.  Replacement  Fund. 

If  the  accounting  company  desires,  or  is  required,  to  segregate  in  a 
special  fund  the  assets  or  any  part  of  the  assets  represented  by  the 
retirement  reserve,  the  ledger  value  of  such  assets  shall  be  included  on 
the  balance  sheet  in  this  account. 

125.  Miscellaneous  Special  Funds. 

This  account  shall  include  the  amount  of  cash  and  the  ledger  value 
of  securities  of  other  companies  and  other  assets  in  insurance,  em- 
ployees' pension,  savings,  relief,  hospital  and  other  funds  which  have 
been  raised  and  specifically  set  aside  or  invested  "for  purposes  not  pro- 
vided for  elsewhere;  also  the  cost  of  securities  issued  or  assumed  by 
the  accounting  company  and  held  in  such  funds.  A  separate  account 
shall  be  provided  for  each  fund. 

126.  Specia-l  Deposits. 

This  account  shall  include  the  debit  balances  described  under  the 
following  sub-heads : 

a.  Coupon  Special  Deposits.  All  moneys  and  bank  credits  spe- 
cially deposited  in  the  hands  of  fiscal  or  other  agents  of  the  accounting 
company  for  the  payment  of  interest  coupons  when  presented.  Such 
coupons  when  paid  from  such  deposits  shall  be  credited  to  this  account 
and  charged  to  the  appropriate  matured  interest  account.  Payments 
to  trustees  (or  other  agents  of  the  holders  of  bonds  or  other  securities) 
of  the  interest  accrued  thereon  which  operate  under  the  terms  of  the 
securities  (or  of  mortgages  supporting  such  securities)  as  a  release  of 
the  paving  corporation  from  further  liability  for  such  interest  shall 
not  be  charged  to  this  account  but  to  the  appropriate  "  Interest  Ac- 
crued "  account. 

b.  Dividend  Special  Deposits.  All  moneys  and  bank  credits 
specially  deposited  in  the  hands  of  the  fiscal  or  other  agent  of  the 
accounting  company  for  the  payment  of  dividends  upon  its  stocks. 
Such  dividends  when  paid  from  such  de^xisit  shall  be  credited  to  this 
account  and  charged  to  the  appropriate  dividend  account. 

c.  Miscellaneous  Special  Deposits.      All   moneys   and   bank 

credits  deix)sited  in  the  hands  of  fiscal  or  other  agents  of  the  account- 
ing company  for  other  special  jjurposes  than  the  payment  of  interest 
coupons  and  dividends.  Charges  to  this  account  shall  specify  the 
pur^jose  for  which  deposit  is  made.    When  such  purposes  are  satisfied, 


BALANCE    SHEET    ACCOUNTS  15 

this  account  shall  be  credited   with  the  amount   specially  deposited  to 

provide  such  satisfaction. 

Note. — This  account  shall  not  include  any  assets  available  for  general  corporate 
purposes. 

131.  Unamortized  Debt  Discount  and  Expense. 

This  accoimt  shall  include  the  total  of  the  net  debit  balances  repre- 
senting the  discount  and  expense  in  connection  with  the  issuance  of 
each  class  of  the  accounting  company's  long  term  debt.  (See  "  Balance 
Sheet  Accounts — General  Instructions  and  Definitions,"  Section  12, 
Page  7.) 

132.  .  Property  Abandoned. 

This  account  is  intended  as  a  suspense  account  which  shall  include 
the  retirement  loss  (i.  e.,  the  original  cost,  estimated  if  not  known,  plus 
cost  of  dismantling,  less  salvage)  on  property  destroyed  or  abandoned 
because  of  replacement,  of  obsolescence,  of  an  extraordinary  casualty, 
or  for  any  other  reason,  when  such  loss  has  not  been  provided  for  in 
advance  through  a  reserve.  Amounts  thus  charged  should  be  amor- 
tized through  annual  or  more  frequent  charges  over  a  definitely  de- 
termined period  to  such  accounts  as  shall  be  proper. 

133.  Jobbing  Accounts. 

This  account  shall  include  the  balances  in  accounts  with  customers 
or  others  for  jobbing  work  not  completed  at  the  date  as  of  which  the 
balance  sheet  is  stated.  Such  accounts,  when  work  is  completed  and 
charges  made,  shall  be  cleared  by  charges  to  accounts  receivable. 

134.  Clearing-  or  Apportionment  Accounts. 

This  account  shall  include  the  balances  in  accounts  maintained  to 
carry  temporarily  the  cost  of  operating  such  facilities  as  garages, 
stables,  storehouses,  etc.,  and  also  overhead  or  burden  costs  such  as  i\ 
is  desirable  shall  be  apix)rtioned  over  the  construction  and  operating 
accounts  involved. 

The  charges  to  operating  accounts  and  the  credits  to  these  accounts 
should,  unless  there  is  some  good  reason  to  the  contrarv,  be  so  dis- 
tributed that  the  costs  for  any  one  year  will  be  absorbed  by  the  trans- 
actions occurring  diu"ing  that  year. 

135.  Work  in  Progress. 

This  account  shall  include  the  total  of  the  balances  in  open  "  work 
order  "  or  "  job  order  "  accounts  for  work  in  progress,  or  in  suspense 
accourits   to   which  the  cost   of   construction   or   maintenance   work   is 


16  BALANCE    SHEET    ACCOUNTS 

temporarily   charged   pending  its   final   distribution   to   the   appropriate 
fixed  capital  or  ojx'rating  expense  accounts. 

Note. — Charges  for  additions  to  fixed  capital  not  involving  replacements,  or 
for  improvements  which  necessitate  retirements  or  reconstruction  of  existing  prop- 
erty when  full  credits  have  been  made  in  advance  to  fixed  capital  accounts  to  cover 
the  ledger  cost  of  property  retired,  may  be  carried  in  fixed  capital  account  No.  359. 
"  Unfinished  Construction,"  which  see. 

136.    Miscellaneous  Suspense. 

This  account  shall  include  all  debits  not  elsewhere  provided  for,  the 
proper  final  disjxjsition  of  which  is  uncertain.  This  will  include  the 
cost  of  tentative  or  preliminary  surveys,  designs,  and  investigations 
made  for  determining  the  feasibility  of  projects  under  contemplation. 
If  the  project  is  thereafter  definitely  undertaken,  such  amount  shall  be 
credited  to  this  account  and  charged  to  the  proper  work  order,  fixed 
capital,  or  other  account.  If  the  project  is  abandoned,  the  cost  of  the 
preliminary  investigation  shall  be  charged  to  the  appropriate  operat- 
ing expense  or  other  account.  Whenever  the  proper  disposition  or  any 
matter  charged  to  this  account  is  determined,  it  shall  be  credited  to 
this  account  and  charged  to  the  appropriate  account. 

141.  Discount  on  Capital  Stock. 

This  account  shall  include  the  total  of  the  net  debit  balances  repre- 
senting the  discount  on  capital  stock  issued  or  assumed  by  the  account- 
ing company.  (See  "Balance  Sheet  Accounts — General  Instructions  and 
Definitions,"  Section  11,  Page  5.) 

142.  Reacquired  Securities. 

When  securities,  whether  debt  or  stocks,  have  been  actually  issued 
by  the  accounting  company  to  bona  fide  holders  for  value  (or  after 
such  issue  by  another  corporation  have  been  assumed  by  the  account- 
ing company)  and  after  such  issue  (or  assumption)  have  been, acquired 
by  the  accounting  company  under  circumstances  which  require  that 
they  shall  not  be  treated  as  paid  or  retired,  they  shall  be  charged  at 
face  value  to  this  account.  If  the  price  at  which  such  securities  have 
been  reacquired  is  greater  or  less  than  the  par  or  face  value,  the  dif- 
ference shall  be  adjusted  through  Profit  and  Loss  or  through  the 
appropriate  discount  or  premium  account. 

Note  A. — This  account  shall  not  include  securities  that  are  merely  guaranteed. 
Note  B. — This  account  shall  not  include  any  securities  held  in  sinking  and  other 
reserve  funds. 

143.  Treasury  Securities. 

This  account  shall  include  the  par  value  of  securities  which  have 
been  nominally  but  not  actually  issued  by  the  accounting  company. 


BALANCE    SHEET    ACCOUNTS  17 

For  definition  of  the  term  "  Nominal  issue  "  see  Note  A  under  account 
No.  201,  "  Capital  Stock  "  and  Note  B  under  account  No.  211,  "  Long 
Term  Debt." 

150.    Profit  and  Loss — Deficit. 

Under  this  head  shall  be  shown  the  debit  balance,  if  any,  in  the 
Profit  and  Loss  account.  (See  "  Profit  and  Loss  Account — General 
Instructions  and  Definitions."    Section  1,  Page  67.) 

201.    Capital  Stock. 

This  account  shall  include  the  items  described  under  the  following 
sub-heads : 

a.  Full  Paid  Stock.  This  covers  the  total  par  value,  of  stocks  or 
receipts  issued  to  represent  permanent  full-paid  interests  in  the  ac- 
counting company,  or  interests  which,  if  terminable,  are  so  only  at  the 
option  of  the  company.  By  "  Full  paid  interest  "  is  meant  an  interest 
in  which  the  full  amount  of  the  subscription  has  been  paid  in. 

b.  Instalments  Paid  on  Stock  Subscriptions.   This  covers  the 

amount  of  instalments  paid  on  subscriptions  for  capital  stocks.  When 
the  full  amount  of  the  subscription  has  been  paid  and  certificates  of 
stock  are  issued  therefor  this  account  shall  be  cleared  and  the  par 
value  of  the  stock  so  issued  shall  be  credited  to  the  account  appropriate 
for  such  stock. 

c.  Stock  Liability  for  Conversion.    This  covers  the  accounting 

company's  liability  under  eigreements  to  exchange  its  capital  stock  for 
the  outstanding  securities  of  companies  whose  physical  proi)erty  has 
been  acquired  under  such  agreements,  but  whose  securities  have  not 
yet  been  surrendered  for  exchange. 

The  records  shall  be  so  kept  that  stocks  of  dififerent  classes  may  be 
separately  shown.  The  following  is  the  most  important  classification 
of  stock : 

(a)  Common  stock :  Stock  which  has  no  preference  in  the  distri- 
bution of  dividends. 

(b)  Preferred  Stock:  Stock  having  preference  in  the  distribution 
of  dividends. 

(c)  Debenture  Stock:  Stock  issued  under  a  contract  to  pav  a 
specified  return  at  specified  intervals. 

Preferred  stock  may  be  further  classified  as  first  preferred,  second 
preferred,  etc.;  or  as  ciinndative  or  non-cumulative ;  or  as  participating 
or  non-participating.  First  preferred  stocks  are  those  which  have  the 
first  claim  upon  such  dividends  as  may  be  distributed;  a  claim  upon 


18  BALANCE    SHEET    ACCOUNTS 

dividends  taking  precedence  over  the  claim  of  common  stock  but  in- 
ferior to  the  first  preferred  stock  may  be  represented  by  second  pre- 
ferred stock,  and  so  on.  Stock  is  cumulative  if  the  amount  by  which 
the  dividend  at  any  dividend  period  fails  to  reach  a  stipulated  divi- 
dend rate  is  carried  forward  to  continue  as  a  claim  upon  the  dividend 
fund  until  satisfied.  Stock  is  non-cumulative  if  such  amount  lapses. 
Stock  is  participating  if  it  is  not  limited  to  a  stipulated  rate  in  the 
amount  of  dividends  which  it  may  receive  but  is  entitled  to  partici- 
pate, in  accordance  with  the  terms  of  the  contract  under  which  it  is 
issued,  in  further  dividends.  It  is  non-pariicipating  if  it  is  limited  to  a 
stipulated  rate. 

Stocks  may  differ  also  with  respect  to  voting  provisions  and  con- 
ditions under  which  they  may  be  retired.  A  separate  ledger  account 
should  be  maintained  for  each  class  of  stock  issued,  and  no  two  stocks 
shall  be  considered  of  the  same  class  unless  they  are  equal  in  their 
interest  or  dividend  rights,  their  voting  rights,  and  the  conditions  under 
which  they  may  be  retired.  The  characteristics  of  any  class  of  stocks 
in  these  three  regards  shall  be  designated  in  the  title  of  the  account 
raised  to  cover  such  stocks  and  shall  be  clearly  expressed  in  the  first 
entry  of  such  account.  To  the  account  for  any  class  of  stock  shall  be 
credited,  when  issued,  the  par  value  of  the  amount  of  stock  of  that 
class  issued.  If  such  issue  is  for  money,  that  fact  shall  be  stated;  and 
if  for  any  other  consideration  than  money,  the  person  to  whom  issued 
shall  be  designated  and  the  consideration  for  which  issued  shall  be  de- 
scribed with  sufficient  particularity  to  identify  it;  if  such  issue  is  to  the 
treasurer  or  other  agent  of  the  corporation  to  be  by  him  disposed  of 
.for  the  benefit  of  the  cor|X)ration,  that  fact,  and  the  name  of  such 
agent,  shall  be  shown ;  and  such  agent  shall,  in  his  account  of  the 
disposition  thereof,  show  the  like  details  concerning  the  consideration 
realized  thereon,  which  account,  when  accepted  by  the  corporation, 
shall  be  preserved  as  a  corporate  record.  If  the  fair  cash  value  of  the 
consideration  realized  upon  the  issue  of  any  amount  of  stock  is  greater 
than  the  par  value  of  such  stock  and  accrued  dividends,  if  any,  ex- 
pressed in  the  contract  of  issue,  the  excess  shall  be  credited  to  account 
No.  202,  "  Premium  on  Capital  Stock,"  and  corresiX)nding  reference 
thereto  shall  be  contained  in  the  entry  relating  to  such  stock  in  the 
stock  account. 

For  each  class  of  stock  the  records  shall  also  show  plainly  the  par 
value  of  (1)  certificates  issued  and  actually  outstanding,  being  those 
not  held  by  the  company,  its  agents  or  trustees,  or  subject  to  its  con- 
trol;  and  (2)  certificates  pledged  and  unpledged  held  in  the  company's 
treasury,  by  its  agents  or  trustees,  or  otherwise  subject  to  its  control, 


BALANCE    SHEET    ACCOUNTS  19 

including"  both  those  reacquired  after  actual  issue  and  those  nominally 
but  never  actually  issued. 

Note  A. — Capital  stock  is  considered  nominally  issued  when  certificates  are 
signed  and  sealed  and  placed  with  the  proper  ofiicer  for  sale  and  delivery,  or  pledged, 
or  otherwise  placed  in  some  special  fund  of  the  accounting  compan}'.  It  is  con- 
sidered to  be  actually  issued  when  it  has  been  sold  to  a  bona  fide  purchaser  for  a 
valuable  consideration,  and  such  purchaser  holds  it  free  from  all  control  by  the 
accounting  company.  All  capital  stock  actually  issued  and  not  reacquired  by  or 
for  the  accounting  company  is  considered  to  be  actually  outstanding.  If  reacquired 
by  or  for  the  accounting  company,  under  such  circumstances  as  require  it  to  be 
held  alive  and  not  canceled  or  retired,  it  is  considered  to  be  nominally  outstanding. 

Note  B. — When  stock  without  par  value  is  issued  the  actual  money  value  of 
the  consideration  realized  from  the  issue  should  be  credited  to  the  account  repre- 
senting that  particular  class  of  stock. 

202.  Premium  on  Capital  Stock. 

This  account  shall  include  the  excess  of  the  actual  money  value  (at 
the  time  of  issue  of  the  stock)  of  the  consideration  received  for  such 
issue  over  the  par  value  of  the  amount  of  stock  issued  and  accrued 
dividends,  if  any,  expressed  in  the  contract  of  issue.  If  the  stock 
is  issued  by  the  corporation  to  its  treasurer  or  other  agent,  the  excess 
of  the  actual  money  value  of  the  consideration  obtained  by  such  agent 
in  exchange  for  such  stock  over  the  par  value  and  accrued  dividends 
thereof  shall  be  considered  the  premium  realized.  A  separate  ledger 
account  shall  be  maintained  for  each  class  of  stock  as  distinguished 
according  to  the  text  of  account  No.  201  preceding.  Entries  in  these 
accounts  shall  be  carried  therein  until  ofifset  by  credits  to  Profit  and 
Loss  upon  reacquisition  of  the  stock  or  by  credits  to  "  Cash  "  or  similar 
account  if  the  corporation  distributes  to  its  stockholders  all  or  any 
part  of  the  premium  realized  on  its  stock. 

203.  Capital  Stock  Subscribed. 

Subscriptions  to  capital  stock  shall  be  credited  to  this  account. 
This  account  shall  be  charged  when  the  subscriber  has  paid  his  sub- 
scription in  full  and  is  entitled  to  receive  certificates  representing  the 
shares  subscribed.  Concurrently,  credits  shall  be  made  to  account 
No.  142,  "  Reacquired  Securities,"  or  account  No.  143,  "  Treasury 
Securities,"  if  deliveries  are  made  from  capital  stock  so  held. 
Otherwise,  credit  the  appropriate  subdivision  of  account  No.  201, 
"  Capital  Stock." 

211.     Long  Term  Debt. 

This  account  shall  include  the  total  par  value  of  all  debt  except 
receiver's  certificates  and  advances  from  affiliated  companies  (for 
which  see  below)  which  by  the  terms  of  its  creation  does  not  mature 
until  more  than  one  year  after  date  of  creation.    This  covers  bonds, 


20  BALANCE    SHEET    ACCOUNTS 

notes,  mortgage  certificates,  and  all  other  forms  of  acknowledgment  of 
indebtedness. 

The  records  shall  be  so  kept  that  long  term  debt  of  different  classes 
may  be  separately  shown.  The  most  important  classification  is  that 
based  upon  the  nature  of  the  lien  or  security  as  follows : 

(a)  Mortgage  Bonds :  Bonds  secured  by  a  lien  on  physical  prop- 
erty and  not  includible  in  the  other,  subdivisions  of  this  account. 

(b)  Collateral  Trust  Bonds:  Bonds  and  notes  having  a  date  of 
maturity  of  more  than  one  year  after  date  of  issue  secured  by  a  lien 
on  securities  or  other  commercial  paj^er;  also  stock  trust  certificates 
that  are  similar  in  character  to  collateral  trust  bonds. 

(c)  Income  Bonds:  Bonds  which  are  a  lien  on  the  accounting 
company's  revenue  alone,  or  bonds  which,  while  being  a  lien  on  its 
property  and  franchises,  can  claim  payment  of  interest  only  in  case 
interest  is  earned. 

(d)  Equipment  Obligations:  Equipment  bonds,  equipment  notes, 
or  other  obligations  secured  by  lien  on  specific  equipment. 

(e)  Miscellaneous  Obligations :  All  long  term  obligations  not  pro- 
vided for  in  the  four  preceding  classes,  including  notes,  unsecured 
certificates  of  indebtedness,  debenture  bonds,  plain  bonds,  real  estate 
mortgages  executed  or  assumed,  and  other  similar  obligations  maturing 
more  than  one  year  after  date  of  issue. 

(f)  Receipts  Outstanding  for  Long  Term  Debt:  Receipts  for  pay- 
ment on  account  of  long  term  debt  securities.  When  the  securities 
are  issued  for  amounts  so  paid,  the  face  value  shall  be  included  in  the 
account  covering  the  class  of  funded  debt  for  which  the  securities  are 
issued. 

Long  term  debt  tnay  differ  also  with  respect  to  rates  of  interest, 
interest  dates,  and  date  of  maturity.  Separate  ledger  accounts  shall 
be  maintained  for  each  class  of  long  term  debt,  and  no  two  amounts 
of  debt  not  agreeing  in  respect  of  all  four  of  the  characteristics  above 
named  shall  be  included  in  the  same  ledger  account,  except  that  parts 
of  any  long  term  debt  issue  agreeing  in  other  characteristics  but  ma- 
turing serially  may  be  treated  as  of  the  same  class.  The  title  of  each 
ledger  account  for  long  term  debt  shall  express  the  four  characteristics 
above  stated,  that  is  to  say,  mortgage  or  other  lien  or  security,  rate 
of  interest,  dates  of  maturity  of  interest,  and  date  of  maturity  of 
principal :  as,  e.  g.,  "  First  Mortgage  5  per  cent.  Q.  F.  10,  August  10, 
1928,"  which  means  a  debt  secured  by  the  company's  first  mortgage, 
bearing  interest  at  the  rate  of  5  per  cent,  per  annum,  interest  matur- 
ing quarterly  on  February  10.  May  10,  August  10,  and  November  10 
of  each  year,  principal  maturing  August  10,  1928. 


BALANCE    SHEET    ACCOUNTS  21 

For  each  class  of  long  term  debt  the  records  shall  also  show  plainly 
(1)  the  par  value  of  certificates  or  other  evidences  of  debt  issued  and 
actually  outstanding,  being  those  not  held  by  the  company,  its  agents 
or  trustees,  or  subject  to  its  control;  and  (2)  the  par  value  of  certifi- 
cates or  other  evidences  of  debt  pledged  or  unpledged  held  in  the  com- 
pany's treasury,  held  by  its  agents  or  trustees,  or  otherwise  subject  to 
its  control ;  including  both  those  reacquired  after  actual  issue  and 
those  nominally  but  never  actually  issued. 

Note  A. — Securities  maturing  one  year  or  less  from  date  of  issue  shall  be  included 
in  account  No.  221,  "  Notes  Payable."  Matured  long  term  debt  shall  be  included 
in  account  No.  226,  "  Matured  Long  Term  Debt  Unpaid." 

Note  B. — Long  term  debt  securities  are  considered  to  be  nominally  issued  when 
certified  by  trustees  and  placed  with  the  proper  officer  for  sale  and  delivery,  or 
pledged  or  otherwise  placed  in  some  special  fund  of  the  accounting  company.  They 
are  considered  to  be  actually  issued  when  they  have  been  sold  to  a  bona  fide  pur- 
chaser for  a  valuable  consideration  and  such  purchaser  holds  them  free  from  all 
control  by  the  accounting  company.  All  securities  actually  issued  and  not  re- 
acquired and  held  by  or  for  the  accounting  company  under  such  circumstances 
as  require  them  to  be  considered  as  held  alive  and  not  cancelled  or  retired  are  con- 
sidered to  be  actually  outstanding.  If  reacquired  by  or  for  the  accounting  company, 
under  such  circumstances  as  require  them  to  be  considered  as  held  alive  and  not 
cancelled  or  retired,  they  are  considered  to  be  nominally  outstanding. 

212.    Receiver's  Certificates. 

When  any  receiver,  acting  under  the  orders  of  a  competent  court,  is 
in  possession  of  the  property  of  a  corporation,  and  under  the  orders  of 
such  court  issues  certificates  of  indebtedness  chargeable  upon  such 
property,  the  par  value  of  such  certificates  shall  be  included  in  this 
account. 

Note. — Separate  sub-accounts  shall  be  maintained  for  receiver's  certificates 
which  mature  in  more  than  one  year  and  those  which  mature  in  one  year  or  less 
from  date  of  issue. 

221.  Notes  Payable. 

This  account  shall  include  the  balances  representing  outstanding 
obligations  in  the  form  of  notes,  drafts,  acceptances,  or  other  similar 
evidences  of  indebtedness  payable  on  demand  or  within  a  time  not 
exceeding  one  year  from  date  of  issue. 

Note. — Secured  notes  and  time  loans  payable  more  than  one  year  from  date 
of  issue  shall  be  included  in  account  No.  211,  "Long  Term  Debt." 

222.  Accounts  Payable. 

This  account  shall  include  the  amount  of  audited  vouchers  or 
accounts  and  audited  pay  rolls  unpaid  on  the  date  of  the  balance 
sheet ;  also  balances  representing  unclaimed  wages  and  outstanding  pay 
and  time  or  discharge  checks  issued  in  payment  of  wages,  open  ac- 
counts  with   other  companies,    except    such   as    are    includible    under 


22  BALANCE    SHEET    ACCOUNTS 

account  No.  241.  "Advances  From  Affiliated  Companies,"  and  similar 
items. 

223.  Consumers'  Deposits. 

This  account  shall  include  the  amounts  deposited  with  the  account- 
ing company  by  consumers  as  security  for  the  payment  of  bills. 
Deposits  refunded  shall  be  charged  to  this  account  and  credited  to 
"Cash";  or  to  account  No.  125,  "Miscellaneous  Special  Funds,"  if  a 
special  fund  for  such  deposits  is  maintained.  Deposits  applicable  to 
uncollectible  or  worthless  bills  shall,  at  the  close  of  the  fiscal  year 
(or  earlier  at  the  option  of  the  accounting  company),  be  credited  to 
the  account  of  the  consumer  involved  and  debited  to  this  account. 

224.  Matured  Interest  Unpaid. 

This  account  shall  include  the  amount  of  matured  and  unpaid  inter- 
est on  debt  of  the  accounting  company  except  where  such  interest  is 
added  to  the  face  of  the  principal  as  is  the  usual  case  with  judgments 
and  sometimes  with  advances  from  affiliated  companies. 

225.  Dividends  Declared. 

This  account  shall  include  the  amount  of  any  dividends  which  have 
been  declared,  but  not  paid.  Dividends  shall  be  credited  to  this  ac- 
count as  of  the  day  upon  which  they  become  a  liability  of  the  account- 
ing company  (which  is  generally  the  date  upon  which  they  are  de- 
clared) and  when  paid  shall  be  charged  to  this  account  and  credited 
to  "  Cash  "  or  other  suitable  account. 

226.  Matured  Long-  Term  Debt  Unpaid. 

This  account  shall  include  the  amount  of  long  term  debt  matured 
and  unpaid  without  specific  agreement  for  extension  as  to  time  of  pay- 
ment, including  unpresented  bonds  drawn  for  redemption  through  the 
operation  of  sinking  and  redemption  fund  agreements. 

Note. — Real  estate  mortgages  whose  nominal  maturity  has  been  reached  but 
which,  by  mutual  agreement  between  mortgagee  and  mortgagor,  are  continued 
indefinitely  as  obligations  of  the  accounting  company  need  not  be  transferred  to 
this  account,  but  may  continue  to  be  carried  in  account  No.  211,  "  Long  Term  I^ebt." 

227.  Miscellaneous  Current  Liabilities. 

This  account  shall  include  the  balances  in  all  open  accounts  repre- 
senting current  liabilities  not  specifically  provided  for  in  the  foregoing 
accounts. 

231.    Taxes  Accrued. 

This  account  shall  include  the  amount  of  taxes  accrued  and  prop- 
erly charged  against  income  or  other  accounts  in  excess  of  the  amount 


BALAN'CE    SHEET    ACCOUNTS  23 

of    taxes    paid   as    shown   by    the    credit    balance    in    the    tax    Habihty 
account. 

An  open  account  entitled  "  Tax  Liability  Account  "  shall  be  raised, 
and  to  it  shall  be  credited  at  the  close  of  each  accounting  period  taxes 
accrued  during  the  period,  corresponding  debits  being  made  to  the 
appropriate  accounts  for  tax  charges.  Such  credits  will  necessarily 
be  based  upon  estimate,  but  from  time  to  time  during  the  year  as  the 
actual  tax  levies  become  known,  the  amount  of  the  periodic  credits 
shall  be  adjusted  so  as  to  include  as  nearly  as  may  be  possible  in  each 
year  the  taxes  applicable  thereto.  When  any  tax  is  paid,  it  shall  be 
charged  to  the  "  Tax  Liability  Account  "  and  credited  to  "  Cash  "  or 
other  suitable  account.  A  debit  balance  in  the  "  Tax  Liability  Ac- 
count "  due  to  the  prepayment  of  taxes  applicable  to  the  period  subse- 
quent to  the  date  of  the  balance  sheet  shall  be  shown  under  account 
No.  117,  "Prepayments,"  while  a  credit  balance  shall  be  shown  under 
account  No.  23L  "Taxes  Accrued." 

232.  Interest  Accrued. 

This  account  shall  include  the  amount  of  interest  accrued  to  the 
date  of  the  balance  sheet,  but  not  payable  until  after  that  date,  on  all 
indebtedness  of  the  accounting  company  except  where  such  interest 
is  added  to  the  face  of  the  principal,  as  is  the  usual  case  with  judg- 
ments, and  sometimes  with  advances  from  affiliated  companies.  When 
such  interest  is  paid,  it  shall  be  charged  to  this  account  and  credited 
to  "  Cash  "  or  other  suitable  account.  Separate  sub-accounts  shall  be 
maintained  for  each  item  of  indebtedness. 

When  interest  matures  without  being  paid,  it  shall  be  charged  to 
this  account  and  credited  to  account  No.  224,  "  Matured  Interest  Un- 
paid." Payments  to  trustees  (or  other  agents)  of  the  holders  of  bonds 
or  other  securities  of  the  interest  accrued  thereon  which  operate  under 
the  terms  of  the  securities  (or  of  mortgages  supporting  such  securi- 
ties) as  a  release  of  the  paying  company  from  further  liability  for  such 
interest  shall  be  considered  equivalent  to  payments  of  interest  made 
directly  to  bondholders  and  such  interest  shall  not  be  credited  to 
"  Matured  Interest  Unpaid." 

The  interest  accrued  u\K)\\  any  judgment  against  the  accounting 
company  shall  not  be  credited  to  this  account,  but  to  the  account  to 
which  such  judgment  stands  credited. 

233.  Miscellaneous  Accrued  Liabilities. 

This  account  shall  include  the  balances  in  all  accounts  representing 
accrued  liabilities  other  than  interest  or  taxes. 


24  BALANCE    SHEET    ACCOUNTS 

241.    Advances  From  Affiliated  Companies. 

This  account  shall  include  the  par  value  of  non-negotiable  notes  due 
to  affiliated  companies,  credit  balances  in  open  accounts  with  such 
companies  other  than  credit  balances  in  credit  accounts  classable  as 
current  liabilities,  and  interest  accrued  on  notes  and  o^^en  accounts 
included  in  this  account  when  such  interest  is  not  subject  to  current 
settlement.  Two  companies  are  affiliated  if  either  one  controls  the 
policy  of  the  other,  or  if  both  are  subject  to  the  same  control. 

This  account  shall  be  sub-divided  as  follows : 

a.  Notes,  including  both  time  and  demand  notes; 

b.  Open  accounts  not  subject  to  current  settlement; 

c.  Interest  accrued  on  amounts  included  in  this  account  when  not 
subject  to  current  settlement. 

Accounts  with  affiliated  companies  which  are  subject  to  current 
settlement,  such  as  charges  for  materials  and  supplies  currently  fur- 
nished, charges  for  repairs  to  equipment,  etc.,  shall  be  classed  as  cur- 
rent assets  or  current  liabilities  as  may  be  appropriate.  Negotiable 
notes  due  to  affiliated  companies  shall  not  be  included  in  this  account 
but  in  account  No.  221,  "  Notes  Payable." 

251.    Retirement  Reserve. 

To  this  account  shall  be  credited  such  amounts  as  are  charged  to 
operating  expense  account  "  Retirement  Expense,"  appropriated 
from  surplus,  or  both,  to  cover  the  retirement  loss  represented  by  the 
excess  of  the  original  cost,  plus  cost  of  dismantling,  over  the  salvage 
value  of  fixed  capital  retired  from  service.  When  any  fixed  capital  is 
retired  from  service,  the  original  cost  thereof  (estimated  if  not  known, 
and  where  estimated,  the  facts  on  which  the  estimate  is  based  should 
be  stated  in  the  entry)  should  be  credited  to  the  proper  fixed  capital 
account  and  charged,  plus  the  cost  of  retirement,  less  salvage,  to  this 
account.  If  the  credit  balance  in  this  account  is  insufficient  to  cover 
the  retirement  loss,  the  excess  over  the  balance  contained  in  the  re- 
serve should  be  charged  to  account  No.  132,  "  Property  Abandoned," 
which  see,  or  other  appropriate  account. 

The  loss  which  this  account  is  intended  to  cover  are  those  incident 

to  important  retirements  of  buildings,  of  large  sections  of  continuous 

structures,  like  electric  line,  or  of  definitely  identifiable  units  of  plant 

or  equipment,  and  the  purpose  of  the  account  is  that  the  burden  of 

such  losses  may  be  as  nearly  as  is  practicable  efjualized  from  year  to 

year,  but  with  due  regard    for  amount  of  t'arnings  available   for  this 

purpose  in  each  year. 

Note  A. — When  property  is  retired  whose  ledger  value  has  been  below  original 
cost,  only  the  remaining  ledger  value  shall  be  written  off  as  retirement  loss. 


BALANCE   SHEET    ACCOUNTS 


25 


Note  B. — When  any  property  is  retired  whose  ledger  value  is  greater  than  the 
known  or  estimated  cost,  such  excess  shall  be  charged  to  Profit  and  Loss. 

XoTE  C. — If  any  property  is  sold  for  more  than  its  original  cost,  the  excess  of  its 
selling  price  over  the  cost  of  the  property  plus  the  cost  of  dismantling  and  selling, 
shall  be  credited  to  this  account. 

Note  D. — If  the  accounting  company  has,  previous  to  the  effective  date  of  this 
uniform  classification  of  accounts,  maintained  a  reserve  under  some  other  title, 
such  as  "  Depreciation  Reserve,"  for  the  purpose  of  equalizing  retirement  losses,  the 
balance  in  such  reserve,  as  at  the  effective  date  of  this  classification,  shall  be  trans- 
ferred to  this  account. 

252.  Casualty  and  Insurance  Reserve. 

When  any  admitted  liability  arises  because  of  loss  or  damage  to  the 
property  of  others,  or  of  injuries  to  employees  or  other  i^ersons,  the 
amount  of  liability  may  (if  not  previously  provided  for  by  insurance 
or  self -insurance)  be  charged  to  the  appropriate  operating  expense  or 
other  accounts  and  credited  to  this  account  against  which  (in  such 
case)  the  actual  cost  of  satisfaction  of  the  liability  shall  be  charged 
when  the  matter  is  determined.  If  the  extent  of  the  liability  can  not 
be  ascertained  promptly  after  the  liability  arises,  it  may  be  estimated 
as  accurately  as  practicable  for  the  purpose  of  determining  the  imme- 
diate charge  to  the  expense  or  other  appropriate  account,  in  which 
case  the  matter  shall  be  adjusted  when  the  extent  of  the  liability  is 
definitely  ascertained.  If  the  loss  is  of  such  character  that  it  is  in 
whole  or  in  part  indemnifiable  under  any  contract  of  insurance  carried 
by  the  accounting  company,  the  indemnifiable  portion  of  the  loss  shall 
be  charged  to  the  insurer  and  credited  to  "  Casualty  and  Insurance 
Reserve."  This  account  shall  also  include  the  amounts  charged  to  the 
operating  expense  account  "  Insurance  "  to  cover  self -carried  ri.sks. 

253.  Unamortized  Premium  on  Debt. 

When  long  term  debt  securities  or  other  evidences  of  indebtedness 
are  disposed  of  for  a  consideration  whose  cash  value  (exclusive  of 
accrued  interest)  is  greater  than  the  par  value  of  such  securities  or 
other  evidences  of  indebtedness,  the  excess  of  such  cash  value  of  the 
consideration  received  over  the  par  value  of  the  securities  or  other 
evidences  of  indebtedness  shall  be  credited  to  this  account.  At  regular 
accounting  intervals  thereafter  a  proper  portion  of  such  premium, 
based  upon  the  life  of  the  security  or  other  evidence  of  indebtedness 
to  maturity,  shall  be  charged  to  this  account  and  credited  to  account 
No.  434,  "Amortization  of  Premium  on  Debt,"  in  the  income  account. 

254.  Sinking"  Fund  Reserves. 

This  account  shall  include  the  net  balances  in  accounts  to  which  are 
credited,  in  accordance  with  the  requirements  of  mortgages  and  other 


26  BALANCE   SHEET    ACCOUNTS 

contracts,  or  by  action  of  the  company's  directors,  definite  appropria- 
tions of  income  and  surplus  whether  held  in  general  funds  or  specifi- 
cally set  aside  in  the  hands  of  trustees,  for  the  purpose  of  retiring  or 
redeeming  bonds  or  other  obligations  of  the  accounting  company.  It 
shall  also  include  such  accretions  from  the  investment  of  funds  specifi- 
cally set  aside  for  the  above  described  purpose  as  are  required  to  be 
added  to  the  reserve. 

When  the  debt  vi^hich  the  sinking  fund  is  created  to  redeem  matures 
and  the  fund  has  accomplished  its  purpose,  the  balance  in  the  reserve 
shall  be  charged  to  this  account  and  credited  to  Profit  and  Loss.  If 
the  mortgage  or  other  obligation  permits,  the  par  value  of  bonds  or 
other  evidences  of  indebtedness  issued  or  assumed  by  the  accounting 
company  which  are  reacquired  through  the  operations  of  a  sinking 
fund  may  be  charged  to  this  account  and  credited  to  Profit  and  Loss 
when  and  as  such  bonds  or  other  evidences  of  indebtedness  are 
reacquired. 

255.  Contributions  for  Extensions. 

To  this  account  shall  be  credited  contributions  in  money  or  property 
made  to  .the  accounting  company  for  the  purpose  of  assuming  the 
burden  or  any  part  of  the  burden  represented  by  the  investment  neces- 
sary for  the  establishment  or  extension  of  services  rendered  by  the 
company.  This  covers  such  items  as  contributions  toward  the  cost  of 
line  extensions  in  sparsely  settled  territory  made  by  consumers,  either 
voluntarily  or  when  reasonably  required  by  the  company  as  a  condi- 
tion of  giving  the  desired  service,  and  the  cost  of  services  to  which 
the  company  has  title,  in  so  far  as  such  cost  is  borne  by  the  consumer ; 
it  also  covers  grants  from  municipal  or  other  governmental  bodies  or 
contributions  from  chambers  of  commerce  and  similar  organizations 
made  with  the  object  of  establishing  a  new  service  in  the  community 
by  assuming  part  of  the  investment  cost  of  the  enterprise. 

Note. — This  does  not  include  advances  for  the  construction  of  extensions  which 
are  ukimately  to  be  repaid  wholly  or  in  part  to  the  consumer ;  such  advances  should 
be  credited  to  account  No.  261,  "Miscellaneous  Unadjusted  Credits."  When  final  de- 
termination has  been  made  as  to  the  amount  of  the  advances  to  be  returned  to  the 
consumer  the  balance,  if  any,  shall  be  credited  to  this  account. 

256.  Conting-ency  Reserve. 

This  account  shall  include  such  amounts  as  the  accounting  company 
sets  aside  to  provide  against  unforeseen  contingencies. 

257.  Miscellaneous  Reserves. 

This  account   shall   include  the  balances   in  all   reserves  other  than 

those  provided  for  in  the  six  preceding  accounts. 

Note. — If  the  accounting  company  maintains  operating  reserves  for  the  pur- 
pose of  equalizing  expenses  from  month  to  month,  such  reserves  shall  be  cleared 


BALANCE   SHEET   ACCOUNTS  27 

annually  unless  there  remains  a  credit  balance  due  to  the  non-completion  of  main- 
tenance work  because  of  adverse  labor  conditions,  non-receipt  of  material,  or  other 
similar  reasons,  in  which  case  such  part  of  the  balance  as  is  applicable  to  unfinished 
work  may  be  carried  over  to  the  following  vear.  Under  no  circumstances  shall  a 
debit  balance  be  carried  over  the  year. 

261.    Miscellaneous  Unadjusted  Credits. 

This  account  shall  include  the  amount  of  credit  balances  in  sus- 
pense accounts  that  can  not  be  entirely  cleared  and  disposed  of  until 
additional  information  is  received. 

270.     Profit  and  Loss — Surplus. 

Under  this  head  shall  be  shown  the  credit  balance  if  any,  in  the 
Profit  and  Loss  account.  (See  "  Profit  and  Loss  Account — General 
Instructions  ana  Definitions,"  Section  1,  Page  67.) 


28  FIXED    CAPITAL   ACCOUNTS 

FIXED  CAPITAL  ACCOUNTS 

Intangible  Fixed  Capital: 

301.  Organization 

302.  Franchises 

303.  Miscellaneous  intangible  capital 

Tangible  Fixed  Capital: 
Specific  Accounts : 

311.  Land 

(a)  Steam  power  plant  land 

(b)  Hydro-electric  power  plant  land 

(c)  Gas  power  plant  land 

(d)  Transmission  system  land 

(e)  Distribution  system  land 

(f)  General  office  land 

(g)  Miscellaneous  land  devoted  to  electric  operations 

(g-1)     Stores  department  land 
(g-2)     General  shops  land 
(g-3)     Transportation  department  land 
(g-4)     Communication  system  land 
(g-5)     Miscellaneous  land 

312.  Structures 

(a)  Steam  power  plant  structures 

(b)  Hydro-electric  power  plant  structures 

(c)  Gas  power  plant  structures 

(d)  Transmission  system  structures 

(e)  Distribution  system  structures 

(f)  General  office  structures 

(g)  Miscellaneous  structures  devoted  to  electric  operations 

(g-1)  Stores  department  structures 

(g-2)  General  shop  structures 

(g-3)  Transportation  department  structures 

(g-4)  Communication  system  structures 

(g-5)  Miscellaneous  structures 

Generating  Plant — Steam 

313.  Boiler  plant  equipment 

314.  Prime  movers  and  auxiliaries — steam 

315.  Turbo-generator  units — steam 

316.  Electric  plant — steam 

317.  Miscellaneous  power  plant  equipment — steam 

Generating  Plant — Hydro-Electric 

318.  Reservoirs,  dams,  and  waterways 

(a)  Reservoirs,  dams  and  intakes 

(b)  Navigation  facilities 

(c)  Waterways 

(d)  Forcbays.  penstocks  and  tailraces 

319.  Roads,  trails,  and  bridges 

320.  Water  turbines  and  water-wheels 


FIXED    CAPITAL    ACCOUNTS  29 


Generating  Plant — Hjdro-EIectric — Continued 

Turbo-generator  units — hydro 

Electric  plant — hydro 

Miscellaneous  power  plant  equipment — hydro 

Generating  Plant — Gas 

Fuel  holders,  producers  and  accessories 

Internal  combustion  engines 

Electric  plant — gas 

Miscellaneous  power  plant  equipment — gas 

Transmission  and  Distribution 
Sub-station  equipment 
Storage"  battery  equipment 
Underground  conduits 
Poles,  towers,  and  fixtures 
Overhead  conductors 
Underground  conductors 
Transmission  roads  and  traii:i 
Services 

Line  transformers  and  devices 
Line  transformer  installation 
Consumers'  meters 
Meter  installation 

Consumers'  Installations 
Installations  on  consumers'  premises 
Commercial  lamps 
Street  lighting  equipment 
Electric  appliances 

G-eneral  Equipment: 

General  equipment 

(a)  Office  equipment 

(b)  Stores  equipment 

(c)  Shop  equipment 

(d)  Transportation  equipment 

(e)  Telephone,  telegraph  and  wireless  system 

(f)  Laboratory  equipment 

(g)  Miscellaneous  equipment 

Miscellaneous  tangible  capital 

Overhead  Costs  and  Other  Undistributed  Items  i 

Engineering  and  superintendence 

Law  expenditures  during  construction 

Injuries  and  damages  during  construction 

Taxes  during  construction 

Interest  during  construction 

Miscellaneous  construction  expenditures 

Fixed  capital  not  classified  by  prescribed  account" 

Cost  of  plant  and  equipment  purchased 

Unfinished  construction 


30  FIXED    CAPITAL    ACCOUNTS 


FIXED  CAPITAL  ACCOUNTS 

General  Instructions  and  Definitions 

1.  Fixed  Capital  Defined. 

By  the  fixed  capital  of  a  corixjration  is  meant  the  property,  both 
tangible  and  intangible,  which  is  devoted  to  the  accomplishment  of 
the  principal  purposes  of  its  business  and  which  has  an  expectation 
of  life  in  service  of  more  than  one  year  from  date  of  installation  in 
service. 

2.  Tangible  and  Intangible  Capital  and  Overhead  Costs. 

Tangible  capital  covers  all  physical  pro^xjrty  classed  as  fixed  capital. 
Charges  to  specific  accounts  for  tangible  property  cover  direct  labor 
and  material  costs  up  to  and  including  the  time  of  the  foreman  super- 
vising the  job ;  also  sudi  overhead  expenditures  for  engineering,  taxes 
during  construction,  etc.,  as  can  be  allocated  to  definite  items  of  prop- 
erty. Charges  to  overhead  cost  accounts  should  cover  only  expendi- 
tures of  this  nature  which  .pertain  to  the  enterprise  as  a  whole  and 
cannot  be  allocated  to  definite  items  of  property.  Intangible  capital 
covers  organization  expenditures,  and  rights,  privileges,  and  other 
property  not  physical,  such  as  franchises  or  patent  rights. 

So  far  as  possible  overhead  costs  should  be  assigned  or  apportioned 
to  particular  jobs  or  items  to  the  end  that  each  item  shall  bear  its 
proper  share  of  such  cost,  and  that  the  entire  cost  of  the  item,  both 
direct  and  overhead,  shall  be  deducted  from  the  fixed  capital  accounts 
at  the  time  of  its  retirement.  Certain  overhead  costs,  however,  which 
clearly  pertain  to  the  entire  enterprise,  such  as  in  some  cases  engineer- 
ing, interest,  etc.,  should  not  be  apportioned,  but  retained  in  the 
appropriate  fixed  capital  accounts  as  part  of  the  investment  cost  so 
long  as  the  enterprise  continues  under  the  form  in  which  it  started. 

These  instructions  should  not  be  interpreted  as  permitting  the  addi- 
tion to  fixed  capital  accounts  of  arbitrary  percentages  to  cover  as- 
sumed overhead  costs,  but  only  as  requiring  the  assignment  or  ai)por- 
tionment  to  particular  accounts  for  tangible  property  of  actual  and 
necessary  overhead  expenditures. 

3.  Fixed  Capital  to  be  Entered  and  Retained  on  Books  at  Cost. 

All  charges  to  fixea  capital  acctnnits  shall  be  at  the  actual  cost  of 
the   property  acquired,  at  the  time  of   its  acquisition.     A   bona  fide 


FIXED    CAPITAL    ACCOUNTS 


31 


contract  or  agreement  of  purchase  and  sale  between  entirely  separate 
parties  shall  be  prima  facie  evidence  of  actual  cost.  Each  item  of 
property  shall  be  carried  in  the  fixed  capital  accounts  at  no  more, 
and  no  less,  than  its  actual  cost  unless,  or  until,  such  property  is 
abandoned,  replaced,  reconstructed,  or  converted,  when  the  account- 
ing shall  be  as  hereinafter  set  forth.  The  foregoing  shall  not,  how- 
ever, be  interpreted  to  forbid  the  inclusion  in  account  No.  357  "Fixed 
Capital  Not  Classified  by  Prescribed  Accounts"  of  undistributed  book 
values  which  have  been  carried  prior  to  the  effective  date  of  a  pre- 
scribed uniform  system  of  accounts,  and  which  may  or  may  not  repre- 
sent the  actual  cost  of  property  in  service;  but  the  inclusion  of  such 
undistributed  book  values  in  fixed  capital  accounts  shall  be  without 
prejudice  to  any  future  determination  of  the  actual  cost  of  the  prop- 
erty. The  term  "cost"  includes  not  only  the  cost  of  labor,  material, 
and  supplies  directly  employed  or  consumed  in  the  construction  and 
installation  of  fixed  capital,  but  also  the  cost  of  preliminary  plans  and 
surveys  and  such  portion  of  the  expenses  for  engineering  and  plant 
supervision  and  of  general  expenses  as  may  be  chargeable  to  the 
fixed  capital  accounts  under  an  equitable  plan  for  apportionment  of 
such  expenses. 

4.    First  Entries  Must  Enable  Identification. 

Every  debit  or  credit  to  a  fixed  capital  or  other  investment  account 
must  be  made  in  such  wise  as  to  be  readily  identified  with  the  particu- 
lar item  of  property  to  which  it  relates.  For  each  item  (or  project) 
of  fixed  capital  or  other  investment  the  records  shall  show  the  date 
of  the  entry,  the  date  of  acquisition  or  installation,  the  date  when 
placed  in  service,  the  actual  money  cost,  and  the  description  thereof 
with  such  particularity  as  to  make  possible  the  location  and  identifi- 
cation thereof  (including  in  case  the  item  is  movable,  the  name  of  the 
manufacturer  and  the  identifying  mark  or  number,  if  any,  imprinted 
thereon,  and  such  other  particulars  as  may  be  necessary  for  identifi- 
cation). Where  two  or  more  items  are  acquired  under  a  single  un- 
divided contract,  the  entry  in  respect  of  each  shall  refer  to  the  others 
and  shall  state  the  entire  consideration,  and  shall  also  state  the  por- 
tion thereof  fairly  applicable  to  the  particular  item  covered  by  the 
entry.  When  any  item  of  capital  is  withdrawn  from  service,  the  date 
of  withdrawal  shall  be  included  in  the  withdrawal  entry  relating  to 
such  item. 

Note  A. — In  the  case  of  continuous  structures  like  electric  lines,  gas  mains,  etc., 
the  record  shall  be  itemized  to  the  extent  that  no  item  shall  contain  more  than 
one  operating  division  or  section  or  more  than  one  type  of  construction.  The  entry 
for  any  item  shall  so  specify  the  location  and  the  principal  physical  characteristics 


32  FIXED    CAPITAL    ACCOUNTS 

(such  as  size,  weight,  type,  etc.)  of  the  chief  constituent  parts  of  the  item  that  iden- 
tification ma}-  be  assured. 

Note  B. — The  date  when  an  item  of  fixed  capital  is  placed  in  service  may,  if 
preferred,  be  kept  in  the  engineering  records. 

5.  Application  of  Classification. 

The  accounts  in  this  classification  shall  include  all  expenditures  for 
fixed  capital  regardless  of  the  way  in  which  the  funds  for  the  construc- 
tion or  acquisition  have  been  provided.  Such  expenditures  shall 
not  be  charged  to  Operating  Expense.  Income,  Surplus,  or  to  special 
funds  in  such  manner  as  to  exclude  from  the  proi^erty  accounts  any 
expenditure  for  fixed  capital. 

These  accounts  shall  also  include  the  necessary  credits  to  represent 
the  cost  originally  charged  to  them  of  property  or  equipment  aban- 
doned, destroyed,  sold,  or  otherwise  retired  from  service.  Wherever 
the  term  original  cost  is  referred  to  in  this  classification,  and  such  cost 
can  not  be  ascertained,  an  estimate  of  the  original  cost  shall  be  u.sed. 

6.  Salvage  and  Insurance. 

Salvage,  as  the  term  is  employed  in  this  classification,  means  the 
value  to  the  accounting  company,  based  upon  a  fair  market  price,  of 
equipment  or  other  material  recovered  in  the  process  of  repairing,  re- 
placing, or  abandoning  plant  and  equipment ;  or  the  net  amount 
received  from  its  sale  if  the  material  is  not  retained  by  the  accounting 
company.  Salvage  recovered  in  connection  with  a  replacement  or 
abandonment  involving  a  deduction  from  fixed  capital  accounts  shall 
be  credited  against  the  account  to  which  the  retirement  loss  is  charge- 
able. Salvage  recovered  in  connection  with  maintenance  expenses  not 
involving  deductions  from  fixed  capital  accounts  shall,  so  far  as  prac- 
ticable, be  credited  to  the  appropriate  maintenance  accounts.  Insur- 
ance recovered  on  property  damaged  or  destroyed  shall  be  treated  in 
the  same  manner  as  salvage. 

7.  Withdrawals  or  Retirements. 

To  the  end  that  the  capital  accounts  shall  at  all  times  disclose  the 
cost  of  all  projjcrty  in  service,  the  cost  of  retired  capital,  whether  re- 
placed or  not,  must  be  deducted  from  (i.  e.,  credited  to)  the  account 
or  accounts  in  this  classification  to  which  such  cost  is  chargeable. 
Every  electrical  corporation  should  therefore  take  such  measures  and 
e.stablish  such  procedure  as  will  insure  strict  compliance  with  these 
requirements.'  When  anything  is  worn  out,  lost,  sold,  destroyed, 
abandoned,  surrendered  upon  lapse  of  title,  becomes  permanently  un- 
serviceable or  is  withdrawn  or  retired  from  service  for  any  other 
reason,  the  amount  at  which  such  thing  stood  charged  in  the  capital 


FIXED    CAPITAL    ACCOUNTS  33 

account  shall  be  credited  to  the  appropriate  capital  account,  and  the 
entry  of  such  credit  shall  cite  by  name  and  page  of  book  or  other 
record  the  original  entry  of  cost  of  the  thing  retired.  If  there  is  no 
such  original  entry,  that  fact  shall  be  stated  in  connection  with  the 
credit  entry.  If  the  amount  originally  charged  (i.e.,  the  ledger  value) 
is  not  separately  recorded,  it  shall  be  taken  to  be  the  proportionate 
share  of  said  property  in  the  value  of  the  entire  group  in  which  the 
property  is  included.  The  entry  shall  state  the  fact  of  such  estima- 
tion. 

Credits  for  original  cost  of  property  retired  should  include  such 
part  of  the  overhead  cost  as  is  equitably  assignable  to  the  item  retired. 

When  the  cost  of  retired  property  is  credited  to  the  appropriate 
fixed  capital  accounts,  it  shall  be  concurrently  charged  (less  any  sal- 
vage or  insurance  that  there  may  be  on  the  retired  property)  to  account 
No.  251,  "Retirement  Reserve,"  to  the  extent  that  the  total  balance 
in  the  reserve  is  sufficient  to  cover  such  loss;  the  remainder,  if  any, 
representing  such  part  of  the  loss  due  to  the  retirement  as  has  not 
been  provided  for  in  advance  by  the  accumulation  of  a  retirement  re- 
serve, shall  be  charged  to  suspense  account  No.  132,  "Property 
Abandoned,"  to  be  amortized  in  such  manner  as  may  be  determined. 

The  cost  of  dismantling,  tearing  down,  or  removing  any  discarded 
plant  or  equipment  shall  be  considered  a  part  of  the  retirement  loss 
and  charged  to  the  "Retirement  Reserve"  or  to  "Property  Aban- 
doned" in  accordance  with  the  provisions  of  the  foregoing  paragraph. 
When  any  replacement  takes  the  form  of  reconstructing  or  converting 
existing  property  in  such  a  way  that  the  cost  of  the  entire  project  can- 
not be  accurately  assigned  as  between  the  cost  of  putting  in  the  new 
property,  and  the  co.st  of  taking  out  the  old,  no  greater  proiX)rtion  of 
the  cost  of  the  project  shall  be  charged  to  fixed  capital  accounts  than 
would  equal  the  cost  of  new  plant  or  equipment  having  equivalent 
capacity  and  expectation  of  serviceable  life.  Such  part  of  the  cost  of 
a  reconstruction  project  as  is  not  chargeable  to  fixed  capital  shall  be 
considered  a  retirement  loss  and  charged  to  the  "  Retirement  Reserve" 
or  to  "  Property  Abandoned  "  as  already  provided. 

The  foregoing  instructions  do  not  apply  to  the  retirement  of  those 
minor  parts,  tne  charges  for  replacing  which  are  made  directly  to 
maintenance  expense  accounts. 

Note  A. — The  foregoing  rule  shall  not  be  applied  to  capital  temporarily  out  of 
service. 

Note  B. — If  a  receiver  or  other  person  temporarily  in  charge  of  a  corporation's 
property  is  not  in  possession  of  the  corporate  records,  he  should  open  on  his  books 
two  accounts,  one  of  which  should  be  credited  with  the  original  cost  (estimated  if 
not  known)  of  fixed  capital  retired  or  permanently  withdrawn  from  service  from 
whatever  cause,  and  the  other  of  which  should  be  charged  with  such  cost,  plus  cost 


34  FIXED    CAPITAL    ACCOUNTS 

of  dismantling,  less  salvage.     The  first  account   may   be   entitled   "  Cost  of  Fixed 

Capital  Retired  During  the  Period to ,"  and  the 

second  may  be  entitled  "  Loss  on  Fixed  Capital  Retired  During  the  Period 

.'to " 

8.  Improvements  on  Leased  Property. 

The  cost  of  additions  to  and  betterments  of  leased  property  should 
be  charged  to  a  sub-account  under  the  appropriate  fixed  capital  ac- 
count, and  retirement  losses  in  connection  therewith  treated  in  the 
same  manner  as  on  company-owned  property.  In  case  the  full  benefit 
of  improvements  will  not  be  obtained  by  the  lessee  because  of  rever- 
sion to  the  lessor  at  the  expiration  of  the  lease,  the  cost  of  improve- 
ments may  be  charged  to  suspense  and  cleared  by  uniform  charges  to 
rent  deductions  within  the  period  of  the  lease.  Ordinary  current  re- 
pairs, including  minor  rearrangements  and  changes  in  connection  with 
leased  buildings,  should  be  charged  to  the  appropriate  maintenance 
account.  Expenditures  charged  to  lessors  or  for  which  lessors  are  re- 
quired under  the  leasehold  agreement  to  reimburse  the  lessee  prior  to 
the  termination  of  the  lease  should  not  be  charged  to  the  fixed  capital 
accounts  of  the  lessee. 

9.  Salvage  from  Equipment,  Tools,  Etc. 

When  the  cost  of  any  work  equipment,  machinery,  tools,  or  ma- 
terials and  supplies  obtained  for  use  in  construction  work  has  been 
charged  to  accounts  in  this  classification  and  the  entire  value  thereof 
has  not  been  consuined  in  the  work,  the  residual  value  of  such  work 
equipment,  machinery,  tools,  or  materials  and  supplies  shall  be 
credited  upon  the  completion  of  the  work  to  the  accounts  to  which 
originally  charged,  and  concurrently  charged  to  the  material  and  sup- 
ply account  or  other  appropriate  accounts. 

10.  Sub-accounts  for  Departmental  Capital. 

The  fixed  capital  accounts  should  be  so  subdivided  as  to  distinguish 
clearly  between  general  capital  and  departmental  capital.  Sub- 
accounts for  departmental  capital  .should  be  so  entitled  and  con- 
.structed  as  to  enable  the  corjxiration  to  report  in  the  detail  indicated 
in  the  following  classification  the  fixed  capital  devoted  to  each  par- 
ticular department  or  jointly  to  any  specific  group  of  departments. 


FIXED    CAPITAL    ACCOUNTS  35 


TEXT  PERTAINING  TO  FIXED  CAPITAL  ACCOUNTS 

Note. — If  the  accounting  company  operates  two  or  more  generating  stations, 
separate  sub-accounts  should  be  maintained  for  the  land,  structures,  and  equip- 
ment pertaining  to  each  such  station.  So  far  as  practicable,  similar  sub-accounts 
should  be  maintained  for  each  sub-station. 

301.  Organization. 

This  account  shall  include  all  fees  paid  to  governments  for  the 
privilege  of  incorporation  and  all  office  and  other  expenditure  incident 
to  organizing  the  corporation  or  other  enterprise  and  putting  it  into 
readiness  to  do  business.  This  covers  cost  of  preparing  and  distribut- 
ing prospectuses,  cost  of  soliciting  subscriptions  for  stock  (but  not  for 
loans  or  for  the  purchase  of  bonds  or  other  evidence  of  indebtedness), 
cash  fees  paid  to  promoters  and  the  actual  cash  value  at  the  time  of 
organization  of  securities  paid  to  promoters  for  their  services  in 
organizing  the  enterprise,  counsel  fees,  cost  of  preparing  and  issuing 
certificates  of  stock  and  cost  of  procuring  certificates  of  necessity  from 
state  authorities  and  other  like  costs;  also  costs  incident  to  preparing 
and  filing  certificates  of  authorization  of  increase  of  capital  stock  and 
to  the  negotiation  and  issue  of  stock  thereunder,  and  of  preparing  and 
filing  certificates  of  amendment  of  articles  of  incorporation.  This  ac- 
count should  not  include  any  discount  on  stocks  or  other  securities 
issued,  nor  should  it  include  any  costs  incident  to  negotiating  loans 
or  selling  bonds  or  other  evidences  of  indebtedness. 

Note. — Cost  of  preparing  and  filing  papers  in  connection  with  the  extension  of 
the  term  of  incorporation  or  with  reincorporation  consequent  upon  reorganization 
should  be  charged  to  account  No.  781.26,  "Law  Expenses,"  or,  by  companies  in 
"Class  C"  or  "Class  D,"  to  the  account  of  which  "Law  Expenses  "  is  a  sub-division. 

302.  Franchises. 

This  account  shall  include  amounts  actually  paid  to  a  state  or  to  a 
political  subdivision  thereof  in  consideration  of  franchises  running  in 
peri>etuity  or  for  a  specified  tenn  of  more  than  one  year  and  necessary 
to  the  conduct  of  the  accounting  company's  operations.  If  any  such 
franchise  is  acquired  by  a  mesne  assignment,  the  charge  to  this  ac- 
count in  respect  thereof  should  not  exceed  the  amount  actually  paid 
therefor  by  the  corporation  to  its  assignor,  nor  should  it  exceed  the 
amount  sj>ecified  above.  Any  excess  of  the  amount  actually  paid  by 
the  corporation  over  the  amount  above  specified  should  be  charged  to 
account  No.  303,  "  Miscellaneous  Intangible  Capital." 

303.  Miscellaneous  Intangible  Capital. 

This  account  shall  include  the  cost  of  patent  rights,  licenses,  privi- 
leges, and  other  intangible  property  not  elsewhere  provided   for;  and 


36  FIXED    CAPITAL    ACCOUNTS 

all  Other  fixed  capital  charges  which  are  not  specifically  assignable  to 
some  other  account  in  this  classification. 

Note. — When  any  corporation  desires  to  reclassify,  according  to  the  Uniform 
Classification  of  Accounts,  the  book  accounts  representing  its  investment  in  plant 
and  equipment  prior  to  the  effective  date  of  this  classification,  any  remainder  of  the 
original  total  book  value  over  the  amount  determined  as  properly  chargeable  to 
other  prescribed  accounts  (including  profit  and  loss  or  reserve  accounts  in  cases 
where  it  is  found  that  part  of  the  original  total  book  value  is  properly  chargeable 
to  such  accounts)  may  be  charged  to  "  Miscellaneous  Intangible  Capital." 

311.    Land. 

This  account  shall  include  the  cost  of  all  land  devoted  to  electric 
operations.  This  covers  land  for  generating  stations,  substations, 
office  buildings,  service  buildings,  warehouses,  garages,  for  storage 
purposes,  or  for  any  other  purpose  in  connection  with  electric  opera- 
tions, rights-of-way  for  transmission  or  distribution  lines  and  for  canals 
and  pipe  lines,  water  rights  and  rights  of  pondage,  flowage,  and  sub- 
mersion, and  land  for  wharves  and  docks  and  the  cost  of  riparian  or 
water  rights  necessary  therefor,  where  such  rights  have  lives  in  excess 
of  one  year  from  the  date  when  placed  in  service.  Such  cost  includes, 
when  assumed  or  paid  by  the  purchaser  in  its  own  behalf,  cost  of 
registration  of  title,  cost  of  examination  of  title,  conveyancer's  and 
notary's  fees,  purchasing  agent's  commission  or  fees,  or  proportion  of 
purchasing  agent's  salary,  taxes  accrued  to  date  of  transfer  of  title, 
and  all  liens  upon  the  title  acquired ;  cost  of  obtaining  consent  and 
payments  for  abutting  damages ;  also  the  first  cost  of  acquiring  lease- 
holds of  land  for  rights-of-way  with  a  life  of  more  than  one  year,  btit 
not  including  the  rents  paid  periodically  in  consideration  of  rights 
obtained  under  such  leases. 

This  account  also  includes  special  assessments  levied  by  public 
authorities  on  the  basis  of  benefits  for  street  and  other  public  improve- 
ments, such  as  new  roads,  new  bridges,  new  sewers,  new  pavements, 
new  curbing,  etc.,  but  not  any  taxes  levied  to  provide  for  maintenance 
of  such  improvements. 

The  cost  of  building  and  other  improvements  should  not  be  included 
in  this  account.  If  at  the  time  of  acquisition  of  an  interest  in  lands 
it  extends  to  buildings  or  other  improvements  thereon,  which  improve- 
ments are  devoted  by  the  accounting  company  to  its  electric  opera- 
tions, and  the  contract  of  acquisition  does  not  determine  the  price  of 
such  improvements,  they  should  be  apjM'aised  at  their  fair  cash  value 
for  use  in  such  operations,  and  such  appraised  value  should  be  charged 
to  the  appropriate  structures  account,  and  excluded  from  this  account. 
If  such  improvements  are  not  devoted  to  electric  operations  but  are 
devoted  to  other  operations  or  held  as  investments,  the  cost    (or  ap- 


FIXED    CAPITAL    ACCOUNTS  37 

praised  value  if  the  cost  is  not  determined  in  the  contract  of  acquisi- 
tion) should  be  charged  to  the  appropriate  investment  account  or 
capital  account  for  other  operations.  If  the  improvements  are  re- 
moved or  wrecked,  the  cost  of  removing  or  wrecking  them  should  be 
charged  and  the  salvage  credited  to  the  land  account. 

Net  proceeds  from  the  sale  of  timber,  cordwood,  or  other  property 
purchased  with  rights-of-way  or  other  lands  should  be  credited  to  this 
account. 

This  account  may  be  subdivided  as  follows,  and,  so  far  as  practi- 
cable, records  of  the  cost  of  land  devoted  to  electric  operations  should 
be  kept  in  the  detail  indicated.  Where  pole  lines  carry  both  trans- 
mission and  distribution  conductors,  right-of-way  may  be  classed  as 
"Transmission  and  distribution  system  land."  Land  used  both  for 
general  offices  and  departmental  purposes  may  be  classed  as  "Miscel- 
laneous." When  the  general  office  is  in  the  power  plant,  the  land 
shall  be  considered  power  plant  land.  Riparian  or  water  rights  shall 
be  considered  hydro-electric  power  plant  land. 

(a)  Steam  jwwer  plant  land. 

(b)  Hydro-electric  power  plant  land. 

(c)  Gas  power  plant  land. 

(d)  Transmission  system  land. 

(e)  Distribution  system  land. 

(f)  General  office  land. 

(g)  Miscellaneous  land  devoted  to  electric  operations. 
(g-1)   Stores  department  land. 

(g-2)  General  shops  land. 

(g-3)  Transportation  department  land. 

(g-4)  Communication  system  land. 

(g-5)  Miscellaneous  land. 

312.    Structures. 

This  account  shall  include  the  cost  of  all  permanent  buildings  and 
structures  to  house,  support,  or  safeguard  property  or  persons,  with 
all  appurtenant  fixtures,  improvements  to  land,  and  other  construc- 
tions. 

Buildings  include  all  fixtures  attached  to  and  forming  a  permanent 
part  thereof,  such  as  water  pipes  and  fixtures,  steam  pipes  and  fixtures 
for  heating  and  ventilating,  gas  pipes  and  fixtures  for  lighting,  etc., 
electric  wiring  and  fixtures  for  lighting,  signaling,  etc.,  elevators,  cranes 
and  hoists  and  the  motive  power  for  operating  them,  building  re- 
frigerating systems,  and  furnaces,  boilers,  etc.,  specially  provided  for 
such    systems,    storage    batteries    and    electric    generators    with    their 


38  FIXED    CAPITAL    ACCOUNTS 

prime  movers  specially  provided  for  building  service,  conduits,  in- 
cluding cable  conduits  which  form  a  part  of  the  building,  but  not  includ- 
ing conduits  which  would  be  removed  with  their  contents ;  and 
subways  or  area  ways  directly  connected  to  and  forming  a  part  of  the 
building.  This  account  includes  cost  of  excavations,  brick  or  concrete 
chimneys,  and  such  piers  and  foundations  for  machinery  and  appa- 
ratus as  are  designed  to  be  as  permanent  as  the  buildings  and  independ- 
ent of  their  use  in  connection  with  any  particular  units  of  equipment. 
Charge  also  the  cost  of  architect's  plans  and  of  sui^erintendence  of 
construction. 

Improvements  to  land  include  roadways,  fences,  sidewalks,  sewer 
systems,  water  systems,  yard  lighting  systems,  grading  and  landscape 
gardening,  docks  and  water  front  improvements,  railroad  tracks,  tram- 
ways and  trestles,  canals,  bench  marks,  monuments,  and  any  other 
permanent  structures  which  are  an  improvement  to  the  property. 
Roadways,  trails,  bridges,  tramways  and  other  construction  used  in 
hydro-electric  production  of  electricity  which  are  not  adjacent  to  the 
generating  plant  proper  should  be  charged  to  account  No.  319,  "Roads, 
trails  and  bridges." 

Note  A. — When  furnaces  and  boilers  are  used  primarily  for  furnishing  steam 
for  some  particular  department  and  only  incidentally  for  furnishing  steam  for  heat- 
ing a  building  and  operating  the  equipment  therein,  the  entire  cost  of  such  furnaces 
and  boilers  should  be  charged  to  the  appropriate  departmental  capital  account,  and 
no  part  to  this  account. 

Note  B. — The  cost  of  specially  provided  foundations,  not  expected  to  outlast 
the  machinery  or  apparatus  mounted  thereon,  should  be  charged  to  the  same  ac- 
count as  is  the  cost  of  the  machinery  or  apparatus  for  which  they  are  provided. 

Note  C. — This  account  should  not  include  any  charges  for  lighting,  heating,  or 
other  fixtures  temporarily  attached  for  purposes  of  display  or  demonstration. 

Note  D. — Where  the  structure  of  a  dam  forms  also  the  foundation  of  the  power 
plant  buildings,  this  structure  should  be  considered  a  part  of  the  dam. 

This  account  may  be  subdivided  as  follows  and  so  far  as  practicable 
records  of  the  cost  of  structures  devoted  to  electric  operations  should 
be  kept  in  the  detail  indicated.  Structures  used  both  for  general 
ofifices  and  departmental  purposes  may  be  classed  as  "Miscellaneous." 
When  the  general  office  is  in  the  power  plant,  the  building  shall  be 
considered  a  power  plant  structure.  When  the  system  for  supplying 
boiler  or  condenser  water  is  elaborate,  as  when  it  includes  a  dam, 
reservoir,  canal,  and  pijx:  line,  the  cost  should  be  charged  to  a  special 
sub-account  entitled  "Water  Supply  Structures — Steam." 

(a)  Steam  power  plant  structures. 

(b)  Hydro-electric  power  plant  structures. 

(c)  Gas  power  plant  structures. 


FIXED    CAPITAL    ACCOUNTS  '  39 

(cl)      Transmission  system  structures. 

(e)  Distribution  system  structures. 

( f )  General  office  structures. 

(g)  Miscellaneous  structures  devoted  to  electric  operations. 
(g-1)    Stores  department  structures. 

(g-2)  General  shop  structures. 

(g-3)  Transportation  department  structures. 

(g-4)  Communication  system  structures. 

(g-5)  Miscellaneous  structures. 

313.  Boiler  Plant  Equipment. 

This  account  shall  include  the  cost    installed  of  all  furnaces,  boilers, 

and   boiler   apparatus   and   accessories    devoted    to   the    production    of 

steam  for  use  in  generating  electric  energy.     This  covers  boilers  and 

valves  thereto   attached,   appurtenant    furnaces   and   grates,   and    flues 

leading    to    smokestacks    and    chimneys,    and    the    specially    provided 

foundations    and    settings    of    such    boilers    and    appurtenances;    also 

metal  smokestacks.     It  also  covers  mechanical  stokers  and  other  like 

apparatus  for  regulating  the  supply  of  fuel,  etc.,   feed  and  hot  water 

heaters  and  economizers,  injectors,  filters,  feed  pumps,  blower  engines, 

coal  conveyors,  ash  conveyors,  reservoirs  for  boiler  or  condenser  water 

and  intake  and  discharge  water  pipes  and  pipe  lines  and  tunnels,  air 

pipes   and  general   service  pipes,   steam  traps,   drains  and   separators, 

and  pipes  for  conducting  steam   from  the  boiler  to  the  engine  or  to 

the  gas  producers,  exhaust  pipes,  etc.     This  account  shall  not  include 

steam  pipes  whose  primary  purpose  is  the  heating  of  buildings. 

Note. — When  the  system  for  supplying  boiler  or  condenser  water  is  elaborate, 
as  when  it  includes  a  dam,  reservoir,  canal,  and  pipe  line,  the  cost  should  not  be 
charged  to  this  account  but  to  a  special  sub-account  under  account  No.  312,  "  Struc- 
tures," entitled  "  Water  Supply  Structures — Steam." 

314.  Prime  Movers  and  Auxiliaries — Steam. 

This  account  shall  include  the  cost  of  all  steam  engines,  whether 
reciprocating  or  rotary.  This  covers  the  specially  provided  founda- 
tions and  settings  of  such  engines.  The  engine  includes  the  throttle 
or  inlet  valve  and  the  governor;  also  condensers,  cooling  towers,  air 
and  circulating  pumps  and  lubricating  systems,  but  not  the  steam 
pipe  leading  from  the  boiler,  nor  the  exhaust  pipe. 

Note  A. — Where  the  electric  rotor  is  mounted  on  the  engine  shaft,  the  shaft 
is  a  part  of  the  steam  engine  and  the  electric  rotor  a  part  of  the  electrical  equip- 
ment. 

Note  B. — This  account  does  not  include  steam  turbo-generator  units,  the  cost 
of  which  shall  be  chargeable  ta  the  next  following  account. 


40  FIXED    CAPITAL    ACCOUNTS 

315.  Turbo-Generator  Units — Steam. 

This  account  shall  include  the  cost  installed  of  steam  turbine-driven 
generator  units  when  the  generator  and  prime  mover  are  purchased  as 
a  unit  and  not  separately.  This  covers  specially  provided  foundations 
and  settings  of  such  units;  also  condensers,  air  and  circulating  sys- 
tems, etc.,  but  not  the  steam  pipe  leading  from  the  boiler  nor  the  ex- 
haust pipe. 

316.  Electric  Plant^Steam. 

This  account  shall  include  the  cost  of  all  electric  generating  appa- 
ratus, motor  driven  exciter  sets,  rotaries,  transformers,  etc.,  used 
primarily  in  connection  vv^ith  the  generation  of  electric  energy  by  steam 
ix)wer  and  not  for  changing  it  in  voltage  or  frequency  for  the  purpose 
of  transmitting  or  distributing  it  more  efficiently.  This  covers  the 
specially  provided  foundations  and  the  installation  of  such  equip- 
ment ;  switchboards,  circuit  breakers,  switches,  instruments,  conductors 
and  other  electrical  apparatus  connected  thereto ;  and  generator  cool- 
ing and  air  washing  apparatus,  including  blowers  and  ducts. 

Note  A. — When  the  electric  rotor  of  such  apparatus  is  mounted  on  the  shaft 
of  the  prime  mover  the  rotor  is  to  be  inckided  herein,  but  not  the  shaft.  Belts, 
countershafts,  and  other  Hke  apphances  intermediary  between  such  prime  movers 
and  the  generators  are  to  be  excluded  herefrom  and  charged  to  account  No.  317, 
"  Miscellaneous  Power  Plant  Equipment — Steam." 

Note  B. — This  account  does  not  include  steam  turbo-generator  units,  the  cost 
of  which  shall  be  chargeable  to  the  next  preceding  account. 

317.  Miscellaneous  Power  Plant  Equipment — Steam. 

This  account  shall  include  the  cost  of  all  miscellaneous  steam  plant 
equipment  not  includible  in  any  of  the  foregoing  accounts,  such  as 
belts,  pulleys,  hangers,  countershafts,  and  other  apparatus  inter- 
mediary between  the  prime  mover  and  the  electric  generator,  machine 
tools,  cars,  locomotives,  and  locomotive  cranes  for  general  plant  pur- 
poses, etc. 

318.  Reservoirs,  Dams  and  Waterways. 

This  account  shall  include  the  cost  of  all  dams  and  appurtenant 
structures  for  reservoirs  and  forebays  devoted  to  the  collection,  storage 
and  regulation  of  water  primarily  for  hydro-electric  production.  This 
covers  the  cost  of  clearing  and  preparing  the  land ;  also  of  all  gates, 
raising  and  lowering  apparatus,  wasteways,  spillways,  fish-ladders,  and 
all  buildings  and  structures  required  in  the  operation  and  maintenance 
of  dams,  reservoirs  and  forebays;  locks  and  e(|nipmcnt  for  handling 
navigation;  the  cost  of  constrtiction.  inchidiiig  the  clearing  and  prepa- 
ration of  land,  of  all  diversion  dams,  ditches,  flumes  and  tunnels  with 


FIXED    CAPITAL    ACCOUNTS  41 

their  gates,  operating  mechanisms,  spillways,  fish-ladders  and  other 
appurtenances  and  the  cost  of  all  buildings  and  structures  used  in 
their  operation  and  maintenance ;  also  the  cost  of  acquisition  or  con- 
struction of  all  penstocks  or  pipe-lines  in  place,  with  their  appur- 
tenant structures  and  accessories  for  delivering  water  from  the  fore- 
bays  to  water-wheels,  and  from  draft-tubes  to  tail  race,  including  con- 
nections at  forebays. 

Nozzles  and  valves  at  water-wheels  should  be  charged  to  account 
No.  320,  "Water  turbines  and  water-wheels." 

Note  A. — Where  the  structure  of  a  dam  forms  also  the  foundation  of  tlie  power 
plant  buildings,  this  structure  should  be  considered  a  part  of  the  dam. 

Note  B. — In  case  the  accounting  company  wishes  to  subdivide  this  account  the 
following  sub-accounts  are  suggested. 

(a)  Reservoirs,  dams  and  intakes. 

(b)  Navigation  facilities. 

(c)  Waterways. 

(d)  Forebays,  penstocks  and  tailraces 

319.  Roads,  Trails  and  Bridges. 

This  account  shall  include  the  cost  of  permanent  roads,  trails, 
bridges,  tramways,  and  railways  used  primarily  in  the  hydraulic  pro- 
duction of  electricity  which  are  not  immediately  adjacent  to  the 
generating  plant  proper,  but  which  are  connected  with  the  operation 
of  distant  reservoirs,  flumes,  etc. 

Note. — It  is  intended  that  this  account  shall  include  the  cost  of  only  such 
private  roads,  etc.  as  it  is  necessary  to  maintain  and  use  in  the  operation  and  main- 
tenance of  the  hydraulic  power  plant.  The  cost  of  roads,  railways,  bridges,  etc. 
necessary  for  construction,  but  abandoned  upon  completion  of  the  plant,  as  also 
the  cost  of  such  facilities  dedicated  to  public  use  and  maintained  at  public  expense, 
should  be  distributed  among  other  proper  fixed  capital  accounts. 

320.  Water  Turbines  and  Water- Wheels. 

This  account  shall  include  the  cost  of  all  turbines  and  water-wheels 

devoted  to  the  generation  of  electric  energy,  their  special  foundations, 

settings,   governors   and  all   apparatus   appurtenant   thereto,    from   the 

head-gates  and  governors  to  wasteways. 

Note  A. — When  the  e.ectric  rotor  is  mounted  on  the  shaft  of  the  prime  mover, 
the  shaft  is  a  part  of  the  prime  mover  and  the  electric  rotor  a  part  of  the  electrical 
equipment. 

Note  B. — This  account  does  not  include  hydraulic  turbo-generator  units,  the 
cost  of  which  shall  be  chargeable  to  the  next  succeeding  account. 

321.  Turbo-Generator  Units — Hydro. 

This  account  shall  include  the  cost  installed  of  hydraulic  turbine- 
driven  generator  units  when  the  generator  and  prime  mover  are  pur- 
chased as  a  unit  and  not  separately.  This  covers  six?cially  provided 
foundations  and  settings  of  such  units;  also  air  and  circulating  pumps, 
lubricating  systems,  valves,  governors  and  draft  tubes. 


42  FIXED    CAPITAL    ACCOUNTS 

322.  Electric  Plant— Hydro. 

This  account  shall  include  the  cost  of  all  electric  generating  appa- 
ratus, motor  driven  exciter  sets,  rotaries,  transformers,  etc.,  used  pri- 
marily in  connection  with  the  generation  of  electric  energy  by  water 
power  and  not  for  changing  it  in  voltage  or  frequency  for  the 
purpose  of  transmitting  or  distributing  it  more  efficiently.  This 
covers  the  specially  provided  foundations  and  the  installation  of 
such  equipment ;  switchboards,  circuit  breakers,  switches,  instruments, 
conductors  and  other  electrical  apparatus  connected  thereto ;  and  gen- 
erator cooling  and  air  washing  apparatus,  including  blowers  and  ducts. 

Note  A. — When  the  electric  rotor  of  such  apparatus  is  mounted  on  the  shaft 
of  the  prime  mover  the  rotor  is  to  be  included  herein  but  not  the  shaft.  Belts, 
countershafts,  and  other  like  appliances  intermediary  between  such  prime  movers 
and    the   generators   are   to   be   excluded    herefrom   and   charged   to    account    No. 

323,  "  Miscellaneous  Power  Plant  Equipment — Hydro." 

Note  B. — This  account  does  not  include  turbo-generator  units  the  cost  of  which 
shall  be  chargeable  to  the  next  preceding  account. 

323.  Miscellaneous  Power  Plant  Equipment — Hydro. 

This  account  shall  include  the  cost  of  all  miscellaneous  hydro- 
electric power  plant  equipment  not  includible  in  any  of  the  foregoing 
accounts,  such  as  belts,  pulleys,  hangers,  countershafts,  and  other  appa- 
ratus intermediary  between  the  prime  mover  and  the  electric  generator, 
machine  tools,  etc. 

324.  Fuel  Holders,  Producers  and  Accessories. 

This  account  shall  include  the  cost  of  producers  and  accessories  de- 
voted to  the  production  of  gas  for  the  purpose  of  operating  electric 
generators,  including  the  cost  of  specially  provided  foundations  and 
installation  of  such  producers  and  accessories.  This  account  includes 
producers,  economizers,  regenerators,  vaporizers,  steam  injectors, 
scrubbers,  exhauster  outfits,  seals,  si>ecially  provided  boiler  and  pumps, 
flues  and  piping,  blower  engines,  pipes  for  the  conduction  of  gas  from 
such  producers  to  holders  and  to  gas  engines,  holders  for  producer 
gas,  exhaust  pipes  from  gas  engines,  etc.  It  does  not  include  pii>es 
whose  primary  purpose  is  the  heating  of  buildings,  nor  does  it  include 
power  transmission  apparatus,  or  water  pipes,  steam  pipes,  water 
pumps,  or  inspirators. 

Include  also  in  this  account  the  cost  of  storage  tanks  for  oil, 
gasoline,  etc.,  used  as  fuel  for  internal  combustion  engines  and  the 
cost  of  facilities  and  apparatus  similar  to  that  designated  above  which 
is  necessary  in  the  delivery  of  the  fuel  to  the  engines. 


•  FIXED    CAPITAL    ACCOUNTS  43 

325.  Internal  Combustion  Engines. 

This  account  shall  include  the  cost  of  all  gas  engines,  Diesel  engines, 
oil  engines,  and  other  internal  combustion  engines  devoted  to  the  pro- 
duction of  electric  energy,  including  the  specially  provided  founda- 
tions and  installation  of  such  engines.  The  engine  includes  the  inlet 
valve,  governor,  and  ignition  and  starting  apparatus,  and  also  such 
devices  as  anti-fluctuators  or  gas  bags,  and  mufflers.  It  does  not 
include  the  pipe  leading  from  the  fuel  container,  nor  the  exhaust 
pipe  in  the  case  of  producer  gas  engines.  Such  pipe  is  chargeable 
to  the  next  preceding  account. 

Note. — Where  the  electric  rotor  is  mounted  on  the  shaft  of  the  prime  mover, 
the  shaft  is  a  part  of  the  prime  mover  "knci  the  electric  rotor  a  part  of  the 
electric  equipment. 

326.  Electric  Plant— Gas. 

This  account  shall  include  the  cost  of  all  electric  generating  appara- 
tus, motor  driven  exciter  sets,  rotaries,  transformers,  etc.,  used  pri- 
marily in  connection  with  the  generation  of  electric  energy  by  gas  or 
other  internal  combustion  engines  and  not  for  changing  it  in  voltage  or 
frequency  for  the  purpose  of  transmitting  or  distributing  it  more  effi- 
ciently. This  covers  the  specially  provided  foundations  and  the  instal- 
lation of  such  equipment;  switchboards,  circuit  breakers,  switches, 
instruments,  conductors,  and  other  electrical  apparatus  connected 
thereto ;  and  generator  cooling  and  air  washing  apparatus,  including 
blowers  and  ducts. 

Note  A. — When  the  electric  rotor  of  such  apparatus  is  mounted  on  the  shaft 
of  the  prime  mover  the  rotor  is  to  be  included  herein  but  not  the  shaft.  Belts, 
countershafts,  and  other  like  appliances  intermediary  between  such  prime  movers 
and   the   generators   are   to   be   excluded   herefrom   and   charged   to   account    No. 

327.  "  Miscellaneous  Power  Plant  Equipment — Gas." 

327.  Miscellaneous  Power  Plant  Equipment — Gas. 

This  account  shall  include  the  cost  of  all  miscellaneous  gas  power 
plant  equipment  not  includible  in  any  of  the  foregoing  accounts,  such 
as  belts,  pulleys,  hangers,  countershafts,  and  other  apparatus  inter- 
mediary between  the  prime  mover  and  the  electric  generator,  machine 
tools,  etc. 

328.  Sub-Station  Equipment. 

This  account  shall  include  the  cost  installed,  whether  in  a  gener- 
ating station  or  sub-station,  of  transformers,  rotary  converters, 
inotor  generators,  regulators,  switchboards  and  connecting  equipment, 
etc.,  used  primarily  for  changing  electric  energy  in  voltage  or   fre- 


44  FIXED    CAPITAL    ACCOUNTS 

quency  for  the  purpose  of  transmitting  or  distributing  it  more  effi- 
ciently. This  also  covers  outdoor  sub-stations  complete,  including 
foundations,  fences,  supporting  framework,  etc. ;  sub-station  equipment 
installed   on   consumer's    premises ;    and    other    conversion    equipment. 

So  far  as  practicable,  separate  sub-accounts  shall  be  maintained  for 
each  station. 

This  account  does  not  include  line  transfonners  installed  for  step- 
ping down  current  from  transmission  or  distribution  voltages  to  the 
voltage  at  which  it  is  used  by  the  consumer. 

This  account  does  not  include  storage  batteries  nor  laboratory  in- 
struments and  apparatus  and  other  equipment  coming  within  the  scope 
of  account  No.  344,  "General  Equipment."  Office  equipment  and 
furniture  permanently  assigned  to  sub-stations  should  be  included  in 
"G"eneral  Equipment,"  but  in  a  sj)ecial  sub-account  for  each  sub-station. 

Note  A. — This  account  may  be  subdivided  by  the  accounting  company  under 
the  following  captions  : 

a.  Transmission  sub-station  equipment. 

b.  Distribution  sub-station  equipment. 

Note  B. — Separate  sub-accounts  may  be  set  up  to  cover  the  cost  of  conversion 
equipment  installed  solely  in  connection  with  transmission  lines,  that  is,  high 
voltage  lines  used  for  transmitting  power  between  stations  or  between  points 
of  generation  or  purchase  and  points  of  transformation  and  distribution,  but 
not  used  to  any  considerable  extent  for  carrying  power  to  points  of  consumption. 

Note  C. — If  the  accounting  company  has  installed  one  or  more  transformers 
at  a  point  wliere  current  is  taken  off  its  transmission  or  distribution  line  by  a 
large  power  consumer,  and  such  transformers  are  used  to  step  down  the  current 
from  the  voltage  at  which  it  is  carried  on  the  accounting  company's  line  to  a 
voltage  at  w'hich  it  is  delivered  to  such  consumer  to  be  by  him  in  turn  trans- 
formed or  converted  for  distribution  within  his  own  plant,  the  cost  of  such  trans- 
formers is  chargeable  to  this  account. 

329.  Storag^e  Battery  Equipment. 

This  account  shall  include  the  cost  of  storage  battery  installations 
complete,  including  elements,  tanks,  tank  insulators,  battery  room 
connections  and  copper  work,  and  cell  switches,  motor  generator 
sets  used  primarily  for  battery  charging,  miscellaneous  small  pumps, 
ventilating  fans,  water  stills,  battery  room  instruments,  and  other 
storage  battery  accessories.  This  account  also  includes  the  battery 
room  flooring  if  specially  constructed  and  separable  from  the  main 
structure  with  respect  to  costs.  It  does  not  include  switchboard  panels 
for  batteries  unless  such  panels  are  separate  from  the  main  switch- 
board and  used  exclusively  for  battery  control. 

330.  Underground  Conduits. 

This  account  shall  include  the  cost  of  all  conduits  and  tunnels 
required  for  underground  wires  and  cables,  including  manholes,  ducts 


FIXED    CAPITAL    ACCOUNTS  45 

and  pipe,  sewer  connections,  sewer  traps,  and  all  material  necessary 
for  the  completion  of  the  underground  conduit  system  devoted  to  the 
protection  of  the  transmission  and  distribution  systems. 

Note. — This  account  may  be  subdivided  by  the  accounting  company  under  the 
following  captions : 

a.  Transmission  underground  conduits. 

b.  Distribution  underground  conduits. 

331.  Poles,  Towers,  and  Fixtures. 

This  account  shall  include  the  cost  of  towers,  transformer  plat- 
forms and  structures  for  supporting  other  line  devices,  poles,  cross- 
arms,  and  insulator  pins ;  braces,  brackets,  and  other  pole  fixtures ;  guys 
and  other  supports  for  holding  the  towers,  structures,  and  poles  in 
position ;  and  all  labor  expended  in  connection  with  the  construction 
pf  pole  lines  or  tower  lines  for  carrying  the  transmission  and  distribu- 
tion systems. 

Note  A. — Separate  sub-accounts  may  be  set  up  to  cover  the  cost  of  towers. 
poles,  and  fixtures  carrying  transmission  lines,  that  is,  high  voltage  hues  used 
for  transmitting  power  between  stations  or  between  points  of  generation  or 
purchase  and  '  points  of  transformation  and  distribution,  but  not  used  to  any 
considerable  extent  for  carrying  power  to  points  of  consumption.  Such  sub- 
accounts may  be  entitled : 

a.  Transmission  poles,  towers,  and  fixtures. 

b.  Distribution  poles,  towers,  and  fixtures. 

Note  B. — The  cost  of  ornamental  street  lighting  poles  and  fixtures  should  not 
be  charged  to  this  account  but  to  account  No.  342,  "  Street  Lighting  Equipment." 

332.  Overhead  Conductors. 

This  account  shall  include  the  cost  installed  of  all  overhead  con- 
ductors and  feeders  (except  services).  This  covers  all  cables,  wires, 
insulators,  and  insulating  material  used  in  overhead  systems ;  also 
ground  wires,  lightning  arresters,  pole  top  switches,  and  other  line 
devices. 

Note. — Separate  sub-accounts  may  be  set  up  to  cover  the  cost  of  conductors 
used  in  transmission  lines,  that  is,  high  voltage  lines  used  for  transmitting 
power  between  stations  or  between  points  of  generation  or  purchase  and  points 
of  transformation  and  distribution,  but  not  used  to  any  considerable  extent  for 
carrying  power  to  points  of  consumption.     Sub-accounts  may  be  entitled : 

a.     Transmission  overhead  conductors. 

/'.     Distribution  overhead  conductors. 

333.  Underground  Conductors. 

This  account  shall  include  the  cost  installed  of  all  underground 
conductors,  and  feeders  (except  services).  This  covers  the  cost  of 
all  cables,  wires,  insulators  and  insulating  material  used  in  under- 
ground systeins. 

Note, — Separate  sub-accounts  may  be  set  up  to  cover  the  cost  of  conductors 
used  in  transmission  lines,  that  is.  high  voltage  lines  used  for  transmitting  power 
between    stations   or   between    points   of   generation    or   purchase   and    points   of 


46  FIXED    CAPITAL    ACCOUNTS 

transformation    and    distribution,    but    not    used    to    any    considerable    extent    for 
carrying  power  to  points  of  consumption.     Sub-accounts  may  be  entitled  : 

a.  Transmission  underground  conductors. 

b.  Distribution  underground  conductors. 

334.  Transmission  Roads  and  Trails. 

This  account  shall  include  the  cost  of  j>ermanent  roads,  trails,  and 
bridges  used  primarily  in  connection  with  the  operation  and  main- 
tenance of  the  transmission  system,  whether  located  on  the  trans- 
mission line  right  of  way  or  elsewhere. 

Note. — It  is  the  intention  that  this  account  shall  include  the  cost  of  only  such 
private  roads,  etc.,  as  it  is  necessary  to  maintain  and  use  in  the  operation  and 
maintenance  of  the  transmission  system.  The  cost  of  roads,  railways,  bridges, 
etc.,  necessary  for  construction  but  abandoned  upon  completion  of  the  plant,  as 
also  the  cost  of  such  facilities  dedicated  to  public  use  and  maintained  at  public 
expense,  should  be  distributed  among  other  appropriate  fixed  capital  accounts. 

335.  ,  Services. 

This  account  shall  include  the  cost  installed  of  all  conductors, 
insulators,  ducts,  supports,  etc.,  leading  from  last  pole  of  overhead 
system  or  from  point  where  wires  leave  underground  system  to  point 
of  connection  with  house  wiring.  It  shall  also  include  the  cost  of 
meter  protection  devices,  such  as  enclosing  meter  boxes  designed 
to  prevent  tampering  with  the  meter  or  the  meter  connections. 

Note. — All  conduits,  poles,  wires,  etc.,  from  distributing  mains  to  the  initial 
points  described  above  will  be  considered  a  part  of  the  distribution  system  and 
their  cost  shall  be  charged  to  the  appropriate  accounts  preceding. 

336.  Line  Transformers  and  Devices. 

This  account  shall  include  the  cost  of  all  line  transformers  (both 
overhead  and  underground),  jx)le  line  lightning  arresters,  transformer 
cut-out  boxes,  line  cut-out  switches,  etc.  It  may  be  subdivided  to  show 
separately  the  investment  in  transformers  and  in  other  devices. 

Note  A. — This  account  does  not  include  the  labor  cost  of  installing  trans- 
formers which  is  provided  for  in  the  following  account. 

Note  B. — This  account  may,  if  desired,  include  the  cost  of  all  transformers 
whether  carried  in  stock  or  actually  in  service,  provided  designation  of  the 
account  on  the  ledger  indicates  the  practice  of  the  accounting  company,  as, 
for  example,  by  the  addition  of  the  phrase  "(includes  line  transformers  in 
stock)." 

337.  Line  Transformer  Installation. 

This  account  shall  include  the  cost  of  labor  and  incidental  expenses 
required  for  the  original  installation  of  line  transformers.  When  any 
line  transformer  service  is  permanently  discontinued,  this  account  .shall 
be  credited  with  an  amount  representing  the  average  installation  cost 
of  a  line  transformer. 


FIXED    CAPITAL    ACCOUNTS  47 

338.  Consumers'  Meters. 

This  account  shall  include  the  cost  of  all  meters,  current  limiting 
devices,  and  appurtenances  used  or  to  be  used  in  measuring  or  deter- 
mining electric  energy  delivered  to  consumers.  This  covers  in  addition 
to  cost  of  meters  to  point  of  delivery  on  the  accounting  company's 
premises  such  incidentals  as  the  cost  of  meter  badges  and  their  attach- 
ment to  the  meters,  testing  and  storing  new  meters,  and  the  first  set 
of  meter  fittings,  connections,  and  shelves. 

Note  A. — This  account  does  not  include  the  cost  of  the  corporation's  meters 
which  record  the  output  of  the  station.  Such  cost  shall  be  charged  to  the 
appropriate  power  plant  electrical  equipment  account. 

Note  B. — The  cost  of  setting,  removing,  or  resetting  consumers'  meters  shall 
not  be  charged  to  this  account. 

Note  C. — This  account  may,  if  desired,  include  the  cost  of  all  meters  whether 
carried  in  stock  or  actually  in  service,  provided  the  designation  of  the  account 
on  the  ledger  indicates  the  practice  of  the  accounting  company,  as,  for  example, 
by  the  addition  of  the  phrase  "(includes  meters  in  stock)." 

339.  Meter  Installation. 

This  account  shall  include  the  cost  of  the  first  setting  of  meters  for 

determining  the  amount  of  electric  energy  delivered  upon  the  premises 

of  consumers.     When  any  meter  service  is  permanently  discontinued, 

this  account  shall  be  credited  with  an  amount  representing  the  average 

installation  cost  of  a  consut-er's  meter. 

Note. — Cost  of  removing  consumers'  meters  and  of  setting  other  meters  sub- 
stituted for  them  shall  not  be  charged  to  this  account,  but  to  account  No.  731. 
"  Distribution  operation  and  maintenance,"  or  the  appropriate  subdivision  thereof. 

340.  Installations  on  Consumers'  Premises. 

This  account  shall  include  the  cost  installed  of  all  equipment 
on  consumers'  premises,  such  as  motor  generator  sets,  motors,  and 
switch  panels  which  are  installed  upon  consumers'  premises  imder  con- 
tract. This  shall  not  include  property  of  the  kinds  designated 
herein  ordinarily  designated  as  sub-station  equipment.  (See  account 
No.  328,  "  Sub-station  Equipment,"  or  account  No.  343,  "  Electric 
Appliances.") 

341.  Commercial  Lamps. 

This  account  shall  include  the  cost  to  the  accounting  company  of  all 
commercial  lamps  loaned  or  rented  to  consumers,  and  the  cost  of  the 
first  installation  thereof,  in  case  it  is  the  ixjlicy  of  the  company  to 
capitalize  such  costs ;  otherwise  the  cost  should  be  charged  to  the 
appropriate  operating  expense  account. 


48  FIXED    CAPITAL    ACCOUNTS 

342.  Street  Lig-hting  Equipment. 

This  account  shall  include  the  (*ost  to  the  accounting  company  of  all 
lighting  equipment  operated  and  maintained  under  the  contract  for 
public  lighting  entered  into  with  the  municipality.  This  will  include 
public  arc  and  incandescent  lamps  and  their  suspension  devices ;  also 
ornamental  lamp  posts  and  fixtures  for  public  incandescent  lamps 
including  the  lamps.  This  account  does  not  include  the  circuits,  nor 
poles  and  fixtures  supporting  the  circuits. 

If  the  company  has  an  investment  in  street  lighting  equipment 
operated  and  maintained  under  a  contract  with  a  public  body  or 
organization  other  than  a  municipality,  such  equipment  shall  be  in- 
cluded in  this  account  under  a  subhead. 

343.  Electric  Appliances. 

This  account  shall  include  the  cost  to  the  accounting  company  of 
electric  motors,  heaters,  etc.,  leased  or  held  for  lease  to  consumers 
(including  municipal  corporations),  but  not  of  those  held  for  sale. 

Note. — The  cost  of  setting  and  connecting  such  appHances  on  the  premises  of 
consumers,  and  the  cost  of  resetting  or  remov?.!  should  not  be  charged  to  this 
account. 

344.  General  Equipment. 

This  account  shall  include  the  cost  installed  oi:  all  equipment  coming 
under  the  following  heads : 

a.  Office  Equipment. — This  includes  the  cost  of  all  office  and 
service  equipment  not  permanently  attached  to  buildings,  such  as  desks, 
chairs,  tables,  movable  safes,  filing  cabinets,  drafting  room  equipment, 
typewriters,  adding  machines,  addressographs,  portable  lamps,  lockers, 
clocks,  fans,  chronograph  systems,  pneumatic  tube  systems,  lunch 
room  equipment,  doctor's  equipment,  pulmotors,  mechanical  office  ap- 
pliances, floor  coverings,  and  other  like  office  appliances  and  equipinent. 
Small  articles  of  slight  value  or  of  short  life  should  not  be  charged 
to  this  account,  but  to  the  appropriate  operating  account. 

b.  Stores  Equipment. — This  includes  the  cost  of  all  equipment 
for  the  receiving,  shipping,  handling  and  storage  of  materials  and  sup- 
plies. This  includes  loading  and  unloading  equipment  (except  cranes 
when  they  are  of  such  a  nature  as  to  be  charged  to  buildings),  derricks, 
portable  cranes,  hoists,  chain  falls,  scales,  trucks,  counters,  shelving, 
wheelbarrows,  and  the  like. 

c.  Shop  Equipment. — This  includes  the  cost  of  all  equipment 
specially  provided  for  shops  (but  not  so  permanently  attached  as  to  be 


FIXED    CAPITAL    ACCOUNTS  49 

properly  chargeable  to  account  No.  312,  "Structures"),  such  as  fur- 
naces, boilers,  gas  producers,  engines,  electric  generators,  and  other 
|)ower  apparatus  oix'rating  machinery  in  such  shops;  machine  tools, 
frames,  hoists,  shafting,  belts,  and  the  like  shop  equipment ;  also  such 
smithing  equipment  in  shops  as  -is  used  principally  for  other  general 
purjxises  than  shoeing  horses  and  repairing  vehicles;  and  all  specially 
provided  foundations  not  expected  to  outlast  the  machinery  or  appa- 
ratus mounted  thereon. 

d.  Transportation  Equipment. — This  includes  the  cost  of  equip- 
ment for  general  transportation  purposes,  such  as  automobiles,  motor 
trucks,  trailers,  tractors,  motorcycles,  and  other  vehicles ;  battery 
charging  outfits,  gasoline  and  oil  storage  tanks  and  pumps,  and  other 
garage  equipment ;  horses,  harness,  drays  and  wagons ;  equipment  for 
shoeing  horses,  and  equipment  for  harness  repair  shops,  vehicle  repair 
shop  and  automobile  repair  shop,  if  this  equipment  is  devoted  exclu- 
sively to  these  purposes. 

e.  Telephone,  Telegraph  and  Wireless  System. — This  includes 
the  cost  of  all  telephone,  telegraph  and  wireless  lines  and  equipment 
for  general  use  in  connection  with  electric  operations,  such  as  poles 
and  fixtures  used  exclusively  for  telephone  and  telegraph  wires;  wires, 
cables,  insulators,  booths,  instruments,  switchboards,  gongs,  dyna- 
motors,  towers,  antennae,  etc. 

f.  Laboratory  Equipment. — This  includes  the  cost  of  all  meter 
and  other  testing  apparatus  and  laboratory  equipment  not  elsewhere 
l>rovided  for. 

g.  Miscellaneous  Equipment. — This  includes  any  other  miscel- 
laneous equipment  not  elsewhere  provided  for,  such  as  construction 
ecjuipment,  including  boilers,  engines,  motors,  hoists,  concrete  mixers, 
and  distributing  apparatus,  pumps,  air  compressors,  riveters,  lathes, 
power  saws,  pipe  machines,  forges,  steam  hammers,  pile  drivers,  steam 
shovels,  lighters,  industrial  track  and  cars,  etc.;  and  any  equipment  of 
a  permanent  nature  which  cannot  be  properly  charged  to  any  of  the 
foregoing  accounts. 

Note  A. — The  cost  of  small  portable  tools  and  implements,  such  as  hammers, 
saws,  wrenches,  files,  jacks,  wire  cutters,  climbing  irons,  etc.,  shall  not  be 
charged  to  this  account.  .Such  items  shall  be  carried  in  account  No.  116, 
"  Materials  and  Supplies,"  until  issued  for  use  when  "  Alaterials  and  Supplies " 
shall  be  credited  and  the  appropriate  work  order  or  other  account  charged  with 
the  cost  of  the  tools  or  implements  so  issued.  The  cost  of  maintaining  tools 
and  implements  shall  be  charged  to  the  expenses  of  the  department  to  which 
they  are  assigned. 

Note  B. — So  far  as  practicable,  separate  sub-accounts  shall  be  maintained  for 
the  equipment  of  each  individual  office  building,  shop,  garage,  etc. 


50  -  FIXED    CAPITAL    ACCOUNTS 

345.    Miscellaneous  Tangible  Capital. 

This  account  shall  include  the  cost  of  all  tangible  electric  capital  not 
elsewhere  provided  for. 

351.  Engineering  and  Superintendence. 

This  account  shall  include  all  expenditures  for  services  of  engineers, 
draftsmen,  and  superintendents  employed  on  preliminary  and  construc- 
tion work,  and  all  expenses  incident  to  the  work  when  such  disburse- 
ments can  not  be  assigned  to  a  particular  tangible  capital  account. 

Note  A. — When  any  of  the  expenses  designated  can  be  charged  directly  to  the 
primary  account  for  which  incurred,  they  shall  be  so  charged.  But  no  charges 
shall  be  made  to  permanent  investment  accounts  for  incidental  services  or 
engineering  performed  by  the  regular  employees  and  officers  of  the  accounting 
company  unless  they  have  been  specially  assigned  to  such  work. 

Note  B. — Expenditures  for  tentative  or  preliminary  designs  or  experiments 
shall  be  carried  in  a  suspense  account  until  it  is  determined  whether  or  not  to 
undertake  the  construction.  If  the  project  is  continued,  such  expenditures  shall 
then  be  transferred  to  the  appropriate  fixed  capital  account;  and  if  it  is  aban- 
doned, they  shall  be  charged  to  operating  expense,  income,  or  profit  and  loss 
accounts  as  may  be  appropriate. 

352.  Law  Expenditures  During  Construction. 

This  account  shall  include  general  expenditures  of  the  following 
nature  incurred  in  connection  with  the  construction  of  an  electrical 
plant,  namely,  the  pay  and  expenses  of  all  counsel,  solicitors,  and  at- 
torneys, their  clerks  and  attendants,  and  expenses  of  their  offices;  print- 
ing briefs,  legal  forms,  testimony,  reports,  etc. ;  payments  to  arbitrators 
>for  the  settlement  of  disputed  questions;  costs  of  suit  and  payments 
of  special  fees,  notarial  fees,  and  witness  fees  and  exi)enses  connected 
with  taking  depositions;  also  all  legal  and  court  expenses. 

Wlien  any  of  the'  expenditures  above  enumerated  can  be  charged 
directly  to  the  account  for  which  incurred,  they  should  be  so  charged 
and  not  to  this  account.  Expenditures  in  connection  with  the  acquisi- 
tion of  right  of  way  or  other  land  should  be  charged  to  account  No. 
311,  "Land."  Law  expenditures  in  connection  with  the  organization 
of  the  corporation  should  be  charged  to  account  No.  301,  "  Organiza- 
tions." (See  "Fixed  Capital  Accounts — General  Instructions  and  Defi- 
nitions," Section  2,  page  30.) 

353.  Injuries  and  Damages  During  Construction. 

This  account  shall  include  all  exi^enditures  incident  to  injuries  to 
persons  or  damages  to  property  of  others  when  caused  directly  in  con- 
nection with  construction  of  electric  plant  and  equipment.  This  covers 
fees  and  proportion  of  salaries  and  expenses  of  physicians  and  sur- 
geons ;  compensation  insurance ;  nursing  and  hospital  attendance ;  medi- 


FIXED    CAPITAL    ACCOUNTS  51 

cal  and  surgical  supplies,  artificial  limbs,  railroad  and  carriage  fares 
for  conveying  injured  persons  and  attendants;  funeral  exf^enses  (in- 
cluding payments  to  undertakers),  proportion  of  pay  and  exj^enses  of 
claim  adjusters  and  their  clerks,  and  pay  and  expenses  of  employees 
and  others  called  in  consultation  in  relation  to  the  adjustment  of  claims 
coming  under  this  head;  also  witness  fees,  court  costs  and  amount  of 
final  judgments. 

When  any  of  the  expenditures  above  enumerated  can  be  charged 
directly  to  the  account  for  which  incurred,  they  should  be  so  charged, 
and  not  to  this  account.  (See  "  Fixed  Capital  Accounts — General  In- 
structions and  Definitions,"  Section  2,  page  30.) 

354.  Taxes  During-  Construction. 

This  account  shall  include  all  taxes  and  assessments  levied  and  paid 
or  chargeable  on  property  belonging  to  the  accounting  company  while 
such  property  is  under  construction,  and  before  the  plant  is  opened  for 
commercial  operation,  except  special  taxes  assessed  for  street  and 
other  improvements,  such  as  grading,  sewering,  curbing,  guttering, 
paving  sidewalks,  etc.,  which  should  be  charged  to  the  account  to  which 
the  property  benefited  is  charged. 

Whenever  any  of  the  expenditures  above  enumerated  can  be  charged 
directly  to  the  account  for  which  incurred,  they  should  be  so  charged, 
and  not  to  this  account.  (See  "Fixed  Capital  Accounts — General 
Instructions  and  Definitions,"  Section  2,  page  30.) 

355.  Interest  During  Construction. 

When  any  bonds,  notes,  or  other  evidences  of  indebtedness  are  sold, 
or  any  interest  bearing  debt  is  incurred,  for  acquisition  or  construction 
of  plant  and  equipment,  the  interest  accruing  on  the  part  of  the  debt 
representing  cost  of  property  chargeable  to  fixed  capital  accounts 
(less  interest,  if  any,  allowed  on  unexpended  balances)  after  such  fund 
becomes  available  for  use  and  before  the  receipt  or  the  completion  or 
coming  into  service  of  the  property  so  acquired  shall  be  included  in 
this  account. 

When  such  securities  are  sold  at  a  premium,  the  proportion  of  such 
premium  assignable  to  the  time  between  date  of  the  actual  issuance  of 
the  securities  and  the  time  when  the  property  acquired  or  the  improve- 
ment made  becomes  available  for  service  shall  be  credited  to  this 
account. 

This  account  shall  include  also  such  proportion  of  the  discount  and 
expense  on  long  term  debt  issued  for  construction  purposes  as  is  equi- 
tably assignable  to  the  period  between  the  date  of  the  actual  issuance  of 


52  FIXED    CAPITAL    ACCOUNTS 

the  securities  and  the  time  when  the  property  acquired  or  the  improve- 
ment made  becomes  available  for  the  service  for  which  it  is  intended. 
The  proportion  of  discount  and  expense  thus  chargeable  shall  be  de- 
termined by  the  ratio  between  the  period  prior  to  the  completion  or 
coming  into  service  of  the  facilities  or  improvements  acquired  or  con- 
structed and  the  period  of  the  entire  life  of  the  securities  issued. 

This  account  shall  also  include  reasonable  charges  for  interest  during 
the  construction  {period  on  the  accounting  company's  own  funds  used 
temporarily  during  such  period  for  construction  purposes. 

When  any  of  the  expenditures  above  enumerated  can  be  charged 
directly  to  the  account  for  which  incurred,  they  should  be  so  charged, 
and  not  to  this  account.  ( See  "  Fixed  Capital  Accounts — General 
Instructions  and  Definitions,"  Section  2,  page  30.) 

Note. — If  any  securities  issued  or  assumed  by  the  accounting  company  are 
sold  or  exchanged  by  or  for  that  company  for  a  consideration  the  actual  money 
vaUie  of  which  at  the  time  of  such  sale  or  exchange  is  less  than  the  value  of  the 
securities  at  par  and  the  accrued  interest  thereon,  if  any,  the  difference  between 
the  money  value  of  the  consideration  received  and  the  par  value  of  the  securities, 
plus  the  accrued  interest,  shall  be  deemed  discount,  and  in  no  case  (except  as 
provided  in  the  third  paragraph  of  this  account)  shall  discount  be  included  as 
part  of  the  cost  of  anything  charged  in  any  fixed  capital  or  investment  account 
prescribed  in  this  classification. 

356.    Miscellaneous  Construction  Expenditures. 

This  account  shall  include  the  salaries  and  exi>enses  of  the  general 
officers  of  an  electric  plant  under  construction,  clerks  in  general  offices 
engaged  on  construction  accounts  or  work;  rent  and  repair  of  general 
offices  when  rented,  with  the  office  expenses ;  insurance  during  con- 
struction (except  workmen's  comi>ensation,  the  cost  of  which  is 
chargeable  to  account  No.  353,  "  Injuries  and  Damages  During  Con- 
struction"); also  all  construction  and  equipment  items  of  a  special 
and  incidental  nature  which  can  not  properly  be  charged  to  any  other 
account  in  this  classification. 

To  this  account  shall  be  credited  discounts  realized  through  prompt 
payment  of  bills  for  materials  and  supplies  used  in  construction,  unless 
such  discounts  are  credited  to  the  particular  bills. 

When  any  of  the  expenditures  above  enumerated  can  be  charged 
directly  to  the  account  for  which  incurred,  they  shall  be  so  charged, 
and  not  to  this  account.  ( See  "  Fixed  Capital  Accounts — General  In- 
structions and  Definitions,"  Section  2,  page  30.) 

Note  A. — This  account  may  include  a  suitable  proportion  of  store  expenses 
when  such  expenses  are  not  assignable  to  specific  materials. 

Note  B. — This  account  should  not  include  any  cost  of  organization  or  any 
costs  or  discounts  connected  with  the  issue  and  disposal  of  stocks,  long  term 
debt,  or  other  securities  and  commercial  paper. 


FIXED    CAPITAL    ACCOUNTS  53 

357.  Fixed  Capital  not  Classified  by  Prescribed  Accounts. 

Under  this  head  shall  be  groiq^ed  the  balances  in  accounts  represent- 
ing the  accounting  company's  investment  in  fixed  capital  prior  to  the 
time  when  it  began  to  follow  the  classification  of  fixed  capital  accounts 
herein  prescribed. 

358.  Cost  of  Plant  and  Equipment  Purchased. 

This  account  shall  include  the  cost  to  the  accounting  company  of 
any  plant  purchased  as  a  whole  when  such  cost  is  not  immediately 
assignable  to  primary  fixed  capital  accounts.  Where  the  contract  of 
purchase  includes  not  only  plant  and  equipment,  but  also  securities  and 
other  assets,  the  appraised  value  of  such  securities  and  other  assets 
shall  be  deducted  from  the  total  cash  cost  and  the  remainder  of  the 
cash  cost  shall  be  charged  to  this  account.  Where  the  consideration 
given  for  the  property  purchased  is  other  than  cash,  such  consideration 
shall  be  valued  on  a  current  cash  basis.  If  the  consideration  includes 
the  assumption  of  liabilities,  such  liabilities  shall  be  included  in  the 
determination  of  the  cost  at  their  cash  value  at  the  time  the  contract 
is  made. 

This  account  shall  be  used  only  as  clearing  account  in  which 
temporarily  to  carry  the  cost  of  plant  and  equipment  purchased  for  a 
lump  sum  until  such  time  as  a  plan  for  distributing  such  cost  to  the 
primary  accounts  appropriate  to  the  property  is  approved  by  the  regu- 
latory commission. 

Note  A. — The  value  at  the  time  of  purchase  of  any  securities  or  other  assets 
acquired  shall  be  included  in  the  accounts  appropriate  for  such  assets.  The  par 
value  of  any  liability  assumed  shall  be  included  in  the  appropriate  liability 
accounts  and  any  necessary  adjustment  between  the  cash  cost  charged  to  the 
property  accounts  and  par  value  shall  be  made  in  the  appropriate  premium  or 
discount  account. 

Note  B. — The  accounting  company  should  procure  in  connection  with  the 
acquisition  of  any  plant  and  equipment  all  existing  records,  memoranda  and 
accounts  in  possession  or  control  of  the  grantor  relating  to  the  construction 
and  improvement  of  such  plant  and  equipment,  and  preserve  such  records, 
memoranda  and  accounts.  Where  the  records,  memoranda  and  accounts  are 
so  intimately  involved  with  other  records,  memoranda  and  accounts  of  the 
grantor  as  to  make  their  transfer  impracticable  or  inadvisable,  certified  copies 
of  them  should  be  procured  by  the  grantee. 

359.  Unfinished  Construction. 

This  account  shall  include  the  balances  in  open  work  orders  rep- 
resenting additions  to  plant  and  equipment  when  the  charges  to  such 
work  orders  have  not  been  distributed  to  the  foregoing  fixed  capital 
accounts. 

Note. — This  account  is  intended  to  include  only  charges  for  new  construc- 
tion not  involving  any  replacement.  If,  however,  at  the  beginning  of  a  job 
involving  the  replacement  or  retirement  of  any  fixed  capital  the  accounting 
company  shall  make  full  credits  therefor  to  the  appropriate  fixed  capital  accounts, 
the  cost  of  installing  new  property  in  substitution  or  replacement  may  be  carried 
in  the  fixed  capital  account  "  Unfinished  Construction." 


54  ■  INCOME   ACCOUNTS 

STANDARD  FORM  OF  INCOME  ACCOUNT 

Ac- 
Item  count 

Income  from  Operating  Properties: 

1  401     Operating  revenues   ***     $ 

2  402     Operating  expenses  $         *** 

3  403     Uncollectible  bills *** 

4  404     Taxes *** 


5  Total  revenue  deductions * 


** 


6  Operating    income    applicable    to    corporate    and 

leased  properties ***     $ 

7  411     Rent  for  lease  of  other  electric  plant $         *** 

8  412     Amortization  of  limited  term  land  rights *** 

9  Total  (items  7  and  8) $         *** 

10     413     Rent  accrued  from  lease  of  electric  plant — Cr.  .  .  *** 


11  Net  rent  deduction  (credit  balance  in  red) 


*** 


12               Balance  of  income  applicable  to  corporate  prop- 
erty        ***     $ 


Income  from  Non-operating  Properties: 

13  421     Miscellaneous  rent  revenues $         *** 

14  422     Interest  on  long  term  debt  owned *** 

15  423     Miscellaneous  interest  revenues *** 

16  424     Dividend  revenues *** 

17  425     Income  from  special   funds *** 

IS  426     Miscellaneous  n()n-c)i>erating  revenues *** 

19  Total  (items  13  U)  18,  inclusive) $         *** 

20  427     Non-oix-'rating  revenue  deductions *** 

21  Total  miscellaneous  income ***  . 

22  Gross  corporate  income  (items  12  and  21) ***     $ 


INCOME   ACCOUNTS  55 

Ac- 

Itein  count 

Deductions  from  Gross  .Corporate  Income: 

23  431     Interest  on  long  term  debt $         *** 

24  432     Miscellaneous  interest  deductions *** 

25  433     Amortization  of  debt  discount  and  expense *** 

26  434     Amortization  of  premium  on  debt — Cr *** 

27  435  Miscellaneous  amortization  chargeable  to  income.  *** 
2S  436  Miscellaneous    deductions    from    gross    corporate 

income *** 

29  Total    deductions    from    gross    corporate    in- 

come        *** 

30  Net  income  (loss  in  red) ***     $ 

Disposition  of  Net  Income: 

31  441      Sinking  fund  appropriations $         =*■** 

32  442     Dividend  appropriations  of  income *** 

33  443     Miscellaneous  appropriations  of  net  income *** 

34  Total  appropriations  of  net  income *** 

35  Balance  transferred  to  surplus ***     $ 


56  INCOME    ACCOUNTS 


INCOME  ACCOUNTS 

General  Instructions  and  Definitions. 

1.  Income  Accounts  Defined. 

The  income  accounts  are  those  that  show  the  sources  and  dis- 
position of  income  during  a  given  period.  Any  change  in  the  items 
shown  on  a  balance  sheet  at  the  end  of  such  a  period  as  compared 
with  a  balance  sheet  at  the  beginning  of  the  period,  which  is  not  merely 
a  transfer  from  one  balance  sheet  account  to  another,  that  is  to  say, 
any  transaction  which  affects  the  profit  and  loss  balance,  must  be 
explained  by  the  income  accounts  or  by  the  profit  and  loss  accounts. 
A  summary  statement  of  income  accounts  arranged  in  convenient 
form  to  show  the  accounting  history  of  a  given  period  is  usually 
called  collectively  the  "  Income  Account."  Income  accounts  whose  title 
and  definition  plainly  indicate  that  they  are  summaries  of  other  ac- 
counts are  not  required  to  be  set  up  as  special  ledger  accounts,  though 
it  may  often  be  a  matter  of  bookkeeping  convenience  to  do  so. 

2.  Form  of  Income  Account. 

The  form  in  which  the  income  account  is  stated  is  determined  by 
considerations  of  convenience  and  clarity.  The  standard  form  adopted 
for  the  purpose  of  this  classification  is  shown  on  pages  54  and  55. 
In  this  form  of  statement  there  are  certain  terms  used  to  indicate 
divisions  of  the  income  account  which  require  si)ecial  definition,  given 
in  the  following  paragraphs. 

3.  Revenues. 

The  word  revenues  as  used  herein  means  all  amounts  of  money 
which  the  accounting  company  receives  or  becomes  lawfully  entitled 
to  recover  for  services  rendered,  for  products  sold,  as  profits  on 
merchandise  sold,  or  as  a  return  upon  its  property  (or  interest  in 
property).  Revenues  are  classified  as  operating  revenues  and  non- 
operating  revenues. 

4.  Operating  Revenues. 

Operating  revenues  are  those  derived  from  the  sale  of  products 
and  merchandise,  from  services  rendered,  from  return  on  property 
used  by  the  person  or  corporation  in  its  own  operations,  and  from 
interest  on  current  funds. 


INCOME   ACCOUNTS  57 

5.  Non-operating-  Revenues. 

Non-operating  revenues  are  those  derived  as  a  return  upon  the 
property  of  the  accounting  company  in  the  hands  of  others  or 
from  its  interest  in  property  in  the  hands  of  others.  They  may 
be  sub-classified  as  rents,  interest,  dividends,  and  miscellaneous. 

6.  Revenue  Deductions. 

Revenue  deductions  include  expenses,  taxes,  and  uncollectible  bills. 

7.  Expenses. 

Expenses  are  those  outgoes  (including  losses  due  to  the  retirement 
of  capital)  necessary  to  the  production  and  distribution  of  the  com- 
modities sold  and  the  services  rendered,  and  to  the  collection  of  the 
revenues.  They  are  divided  into  o^jerating  expenses,  and  non-operating 
expenses. 

8.  Taxes. 

Taxes  are  those  ainiual  or  other  payments  exacted  by  governments 
for  the  purpose  of  raising  funds  for  public  uses. 

9.  Uncollectible  Bills. 

When  a  corporation  is  engaged  regularly  in  rendering  to  general 
consumers  a  service,  or  in  supplying  to  such  consumers  a  com- 
modity, current  accounts  or  claims  against  such  consumers  for  such 
services  rendered  or  commodity  supplied  which  are  incapable  of  col- 
lection by  the  exercise  of  reasonable  diligence  are  included  under 
the  name  Uncollectible  Bills. 

10.  Income. 

Income  is  what  is  left  after  subtracting  revenue  deductions  from 
revenue.  Income  from  operating  properties  is  income  derived  from 
the  operation,  or  as  a  comi)ensation  for  the  use,  of  properties  devoted 
to  the  undertakings  for  which  the  accounting  company  is  organized. 
Income  from  non-operating  properties  is  income  derived  from  prop- 
erties not  devoted  to  the  undertakings  for  which  the  accounting  com- 
pany is  organized ;  also  from  properties  not  belonging  to  the  account- 
ing company,  but  in  which  it  has  an  interest  through  ownership  of 
stocks,  bonds,  or  otherwise.  Operating  income  applicable  to  corporate 
and  leased  properties  is  that  income  arising  from  any  class  of  opera- 
tions which  is  available  to  ]>ay  a  return  in  one  form  or  another 
u[x)n  capital  employed  in  tliat  class  of  operations.  Income  applicable 
to  corporate  property  is  that  income  which  is  available  to  pay  a  re- 


58  INCOME   ACCOUNTS 

turn  in  one  form  or  another  on  capital  owned  by  the  accounting 
company.  It  is  the  operating  income  applicable  to  corporate  and 
leased  properties  less  rentals  for  the  use  of  capital  not  owned.  Gross 
income  is  income  from  all  sources  whatsoever.  It  might  also  be 
called  total  net  revenue.  Gross  corporate  income  is  that  income  ap- 
plicable to  corporate  properties,  that  is,  gross  income  less  rentals 
for  capital  not  owned.  Net  income  is  that  amount  left  after  all  con- 
tractual or  compulsory  deductions  have  been  made  from  gross  income, 
except  such  sinking  fund  accruals  as  are  required  to  be  tem^xDrarily 
reserved. 

11.  Rents. 

Rents  are  payments  for  the  use  of  property  employed  in  the  busi- 
ness, but  not  owned  by  the  accounting  company.  The  standard  form 
of  income  statement  established  by  this  system  of  accounts  provides, 
therefore,  for  deducting  from  gross  income  rentals  paid  for  the 
use  of  property  not  owned,  in  order  that  the  income  available  for 
a  return  ujxDn  that  part  of  the  capital  invested  in  the  enterprise  by 
the  accounting  company  may  clearly  appear.  Minor  rents,  how- 
ever, such  as  rents  for  land,  buildings  and  comparatively  small  por- 
tions of  plant  and  equipment,  not  constituting  a  distinct  operating 
unit,  used  for  departmental  pur^xjses  are  more  suitably,  for  adminis- 
trative pur^Mses,  charged  directly  to  one  of  the  divisions  of  the 
operating  expense  schedules  and  suitable  treatment  of  such  expendi- 
tures is  provided  for  in  the  operating  expense  accounts. 

12.  Delayed  Income  Items. 

Delayed  items  are  those  representing  transactions  which  occurred 
prior  to  the  period  covered  by  the  income  account,  but  which  were 
not  recorded  currently.  Such  items  may  be  charged  or  credited  to 
the  appropriate  income  account  for  the  fiscal  period  in  which  the 
transactions  are  actually  recorded.  If,  however,  the  amount  of  such 
items  is  relatively  so  large  that  its  inclusion  in  the  income  account 
for  a  single  year  would  result  in  a  seriously  abnormal  income  state- 
ment, and  no  provision  has  been  made  through  accruals  to  reserves 
or  susj)cnse  accounts  for  anticipating  such  transactions,  the  account- 
ing company  may  distribute  the  amount,  or  any  part  thereof,  to 
Profit  and  Loss. 


INCOME   ACCOUNTS  59 


TEXT  PERTAINING  TO  INCOME  ACCOUNTS. 

401.  Operating-  Revenues. 

Under  this  head  shall  be  shown  the  total  revenues  of  the  accounting 
company  from  electric  operations  during  the  ],>eriod  covered  by  the 
income  account.  (For  the  primary  operating  revenue  accounts  see 
pages  7Z  to  75.) 

402.  Operating  Expenses. 

Under  this  head  shall  be  shown  the  total  expenses  of  the  accounting 
company  for  electric  operations  during  the  period  covered  bv  the  in- 
come account.  (For  the  primary  operating  expense  accounts  see  pages 
86  to  117.) 

403.  Uncollectible  Bills. 

This  account  shall  include  charges  for  accounts  due  from  consumers 
or  customers  which,  after  a  reasonably  diligent  effort  to  collect,  have 
proved  impracticable  of  collection.  If  accounts  which  have  been  so 
written  off  are  afterwards  collected,  the  amount  received  should  be 
credited  to  this  account. 

Note. — Charges  to  this  account  may  be  made  on  the  basis  of  the  estimated 
average  loss  due  to  uncollectible  accounts  in  which  case  the  concurrent  credit 
shall  be  to  a  special  account  under  balance  sheet  account  No.  257,  "  Miscellaneous 
Reserves."  To  the  reserve  thus  established  shall  be  charged  such  accounts  as 
are  determined  to  be  uncollectible.  When  charges  for  uncollectible  accounts 
are  thus  made  by  estimate,  the  estimate  shall  be  adjusted  at  the  end  of  each 
fiscal  year  to  conform  to  the  experience  of  the  accounting  company  as  deter- 
mined by  analysis  of  its  accounts  receivable. 

404.  Taxes. 

This  account  shall  include  the  amount  of  taxes  applicable  to  the 
electric  operations  of  the  accounting  company  during  the  period  for 
which  the  income  account  is  stated. 

Separate  account  shall  be  kept  of  the  taxes  applicable  to  electric 
operations  and  to  operations  other  than  electric,  as  well  as  to  non-oper- 
ating revenues,  if  the  accounting  company  has  such  other  operations  or 
non-operating  revenues.  When  taxes  are  levied  on  property  used  in 
two  or  more  different  classes  of  operations  in  such  a  way  that  the 
amount  applicable  to  each  class  is  not  definitely  stated,  the  total  amount 
of  the  levy  shall  be  apportioned  by  the  accounting  company  on  some 
fair  basis  between  the  two  or  more  classes  of  operations. 

The  tax  accounts  shall  be  charged  at  regular  accounting  intervals 
and   the   "Tax   Liability   Account"    (see   account    No.    231,    "  Ta.xes 


60  INCOME   ACCOUNTS 

Accrued  ")  concurrently  credited  with  the  period's  proportion  of  taxes 
appHcable  to  the  operations  covered  by  each  account.  If  the  exact 
amounts  of  the  annual  taxes  are  not  known,  they  shall  be  estimated  and 
a  due  share  of  the  estimated  amounts  shall  be  charged  for  each  account- 
ing period.  From  time  to  time  during  the  year  as  the  actual  tax  levies 
become  known,  the  periodic  charges  shall  be  adjusted  so  as  to  include  as 
nearly  as  possible  the  total  amount  of  the  taxes  in  the  period  to  which 
they  apply. 

Note  A. — Taxes  on  property  leased  should  be  charged  to  the  appropriate  tax 
account  hy  the  party  which  under  the  terms  of  the  lease  contract  actually  pays 
such  taxes.  If,  under  the  provisions  of  the  lease,  the  party  actually  paying  the 
taxes  is  reimbursed  by  the  other  party  to  the  lease,  the  amount  of  such  reimburse- 
ment shall,  when  the  taxes  are  paid  in  the  first  instance  by  the  lessor,  be  credited 
to  the  appropriate  rent  revenue  account  of  the  lessor  and  charged  by  the  lessee 
to  the  appropriate  rent  deduction  account ;  when  the  taxes  are  paid  in  the  first 
instance  by  the  lessee,  the  amount  of  the  reimbursement  shall  be  credited  to  the 
appropriate  rent  deduction  account  of  the  lessee  and  charged  by  the  lessor  to  the 
appropriate  revenue  account. 

Note  B. — The  tax  accounts  must  not  include  any  fees  or  charges  sometimes 
called  taxes,  such  as  water  taxes,  drainage  taxes,  or  fire  taxes,  which  are 
payments  for  some  specific  service  rendered  by  the  government. 

411.  Rent  for  Lease  of  Other  Electric  Plant. 

This  account  shall  include  all  amounts  accrued  against'  the  accounting 
company  for  rent  of  any  electric  plant  constituting  a  distinct  operating 
unit,  such  as  a  production  plant  or  distribution  system,  under  a  lease 
giving  exclusive  possession  to  the  lessee. 

412.  Amortization  of  Limited  Term  Land  Rights. 

When  the  right  to  use  land  for  a  limited  term  has  been  acquired 
under  a  contract  by  which  the  consideration  is  a  single  immediate 
payment  instead  of  a  series  of  periodic  rentals  during  the  term 
for  which  the  land  is  transferred,  this  account  shall  include  an 
amount  sufficient  to  cover  such  portion  of  the  life  of  such  limited 
interest  in  land  as  has  expired  during  the  accounting  j)eriod.  The 
amount  charged  to  this  account  shall  be  concurrently  credited  to  the 
fixed  capital  account  to  which  the  cost  of  acquiring  such  an  interest 
in  land  was  originally  charged. 

413.  Rent  Accrued  from  Lease  of  Electric  Plant — Or. 

This  account  shall  include  all  amounts  accruing  to  the  accounting 
company  as  rental  for  its  electric  plant  or  any  j)art  thereof  constitut- 
ing a  distinct  operating  unit,  such  as  a  production  plant  or  distribu- 
tion system,   under  a  lease  giving  exclusive  possession   to  the  lessee. 

Note.— Rentals  received  for  the  use  of  comparatively  small  portions  of  plant 
or  equipment,  not  constituting  a  distinct  operating  unit,  the  cost  of  which  is 
carried  in  electric  fixed  capital  accounts,  and  the  cost  of  maintaining  which  is 


INCOME   ACCOUNTS  61 

ordinarily  borne  by  the  owner,  shall  not  be  credited  to  this  account  but  to 
operating  revenue  account  No.  613,  "  Rent  from  Property  Used  in  Operation," 
even  though  the  lessee  has  exclusive  possession. 

421.  Miscellaneous  Rent  Revenues. 

This  account  shall  include  all  rent  revenues  accruing  to  the  account- 
ing company  from  properties  not  devoted  to  the  undertakings  for  which 
it  is  organized.  This  covers  such  revenues  as  rentals  from  real  estate 
not  used  in  operations. 

422.  Interest  on  Long  Term  Debt  Owned. 

This  account  shall  include  interest  accruing  to  the  accounting  com- 
pany upon  securities  of  other  companies  and  national,  state,  or  munici- 
pal governments.  Interest  accrued  shall  not  be  credited  to  this  account 
unless  its  payment  is  reasonably  assured ;  in  other  cases  credits  to  this 
account  shall  be  based  upon  the  interest  actually  collected. 

Note  A. — No  interest  upon  reacquired  securities  issued  or  assumed  by  the 
accounting  company  shall  be  credited  to  this  account. 

Note  B. — Interest  accrued  on  securities  of  other  companies  held  in  sinking 
or  other  special  funds  shall  not  be  credited  to  this  account,  but  to  account  No. 
425,  "  Income  from  Special  Funds." 

423.  Miscellaneous  Interest  Revenues. 

This  account  shall  include  interest  accrued  to  the  accounting  company 
on  loans,  notes,  and  advances,  special  deposits,  and  all  other  interest 
bearing  assets  except  funded  securities  and  current  funds  employed 
primarily  in  the  conduct  of  the  business  for  which  the  accounting  com- 
pany is  organized.  Interest  accrued  shall  not  be  credited  to  this  ac- 
count unless  its  payment  is  reasonably  assured ;  in  other  cases  credits 
to  this  account  shall  be  based  upon  the  interest  actually  collected. 

424.  Dividend  Revenues. 

This  account  shall  include  revenues  derived  by  the  accoimting  com- 
pany from  dividends  on  stocks  of  other  companies  held  by  it.  Accruals 
of  guaranteed  dividends  may  be  included  in  this  account  if  their  pay- 
ment is  reasonably  assured. 

Note  A. — No  dividends  on  reacquired  securities  issued  or  assumed  by  the 
accounting  company  shall  be  credited  to  tliis  account. 

Note  B. — Dividend  revenues  from  securities  of  other  companies  held  in  sink- 
ing or  other  special  funds  shall  not  be  credited  to  this  account,  but  to  account 
No.  425,  "  Income  from  Special  Funds." 

425.  Income  from  Special  Funds. 

This  account  shall  include  income  (whether  interest  or  dividends), 
accrued  on  cash,  securities  (not  issued  or  assumed  by  the  accounting 
company),  and  other  assets  held  in  sinking  and  other  special  funds. 

Note. — This  account  covers  all  income  from  investments  of  special  funds, 
whether  required  to  be  retained  in  the  fund  or  not.     If  such  income  is  required 


62  INCOME   ACCOUNTS 

to  be  retained  in  the  fund  and  the  fund  required  to  be  represented  by  a  reserve, 
the  amount  of  such  accretions  to  the  fund  shall  be  concurrently  credited  to  the 
appropriate  reserve  account  and  charged  to  account  No.  441,  "  Sinking  Fund 
Appropriations,"  or  account  No.  443,  "  Miscellaneous  Appropriations  of  Net 
Income,"  as  may  be  appropriate. 

426.  Miscellaneous  Non- operating-  Revenues. 

This  account  shall  include  all  revenues  accruing  to  the  accounting 
company  in  accordance  with  the  terms  of  any  contract  by  which  the 
company  is  entitled  to  participate  in  the  profits  resulting  from  the 
operations  of  others  and  all  other  non-operating  revenues  not  provided 
for  in  any  of  the  foregoing  accounts. 

Note. — "  Profits  from  the  operations  of  others "  does  not  include  any  divi- 
dends on  stock.  Revenues  from  dividends  should  be  credited  to  account  No. 
424,  "  Dividend  Revenues." 

427.  Non-operating"  Revenue  Deductions. 

This  account  shall  include  all  expenditures  necessary  to  receiving  or 
collecting  non-operating  revenues  as  listed  under  the  following  sub- 
heads. If  desired,  each  sub-head  may  be  made  a  separate  ledger  ac- 
count. 

a.  Rent  Expense. — This  covers  all  expenses  arising  in  connection 
with  the  procuring  of  revenues  from  rented  properties  which  are  prop- 
erly credited  to  account  No.  421,  "  Miscellaneous  Rent  Revenues," 
such  as  the  cost  of  negotiating  contracts,  advertising  for  tenants,  fees 
paid  conveyancers,  collectors'  commissions,  cost  of  enforcing  payment 
of  rent,  cost  of  ousting  tenants,  etc.  This  includes  expense  while  the 
property  is  idle  awaiting  occupant;  also  cost  of  maintenance  of  property 
when  such  cost  is  borne  by  the  owner.  Such  maintenance  does  not 
include  taxes. 

b.  Interest  Expense. — This  covers  all  expenses  in  connection  with 
the  collection  of  interest  upon  investments.  It  does  not  include  taxes 
on  such  investments. 

c.  Dividend  Expense. — This  covers  all  expenses  in  connection  with 
the  collection  of  dividends  on  stocks  of  other  corporations;  also  all 
expenses  incurred,  as  in  the  investigation  of  the  affairs  of  the  corjxjra- 
tions  whose  stocks  are  held,  whether  for  the  purix)se  of  detecting 
mismanagement,  or  for  the  purix)se  of  inducing  the  declaration  of 
dividends;  and  all  expenses  connected  with  enforcing  payments  of  divi- 
dends when  declared. 

d.  Miscellaneous  Non-Opekating  Expense. — This  covers  the 
cost  of  negotiating  contracts  by  which  the  accounting  company  is 
entitled  to  share  in  profits  from  the  operations  of  others,  and  all  ex- 


INCOME    ACCOUNTS  63 

penses  of  collecting  the  accounting  company's  proportion  of  such 
profits  and  all  expenses  of  procuring  the  modification  or  dissolution 
of  any  such  contract;  also  all  other  non-operating  expenses  (as  ex- 
penses are  defined  under  "  Income  Accounts — General  Instructions  and 
Definitions,"  Section  7,  page  57)  which  are  not  provided  for  under 
the  foregoing  sub-heads, 

e.  Non-Operating  Taxes. — This  covers  all  taxes  accruing  upon 
non-operating  property,  revenue  from  which  is  properly  credited  to 
accounts  Nos,  421  to  426,  inclusive,  and  all  other  taxes  not  upon  prop- 
erty, but  assignable  to  non-operating  revenues. 

f.  Uncollectible  Non-Operating  Revenues. — This  covers  any 
non-operating  revenues  judged  by  the  accounting  company  to  be  un- 
collectible. 

431.  Interest  on  Long  Term  Debt. 

This  account  shall  include  all  interest  accrued  on  outstanding  long 
term  debt  issued  or  assumed  by  the  accounting  company,  the  liability 
for  which  is  included  under  balance  sheet  account  No.  211,  "Long 
Term  Debt  " ;  also  interest  accrued  on  debenture  stocks  and  on  receiver's 
certificates  which  mature  more  than  one  year  after  date  of  issue.  This 
account  does  not  include  interest  on  securities  held  by  the  accounting 
company  in  its  treasury,  in  sinking  or  other  special  funds,  or  pledged 
as  collateral. 

Note  A. — The  amount  charged  to  this  account  shall  be  concurrently  credited 
to  account  No.  232,  "Interest  Accrued,"  to  which  account  shall  be  deljited  pay- 
ments made  on  account  of  interest. 

Note  B. — If  any  securities  issued  or  assumed  by  the  accounting  company  are 
held  in  a  sinking  or  other  special  fund,  the  interest  on  such  securities  shall  not 
be  charged  to  this  account. 

432.  Miscellaneous  Interest  Deductions. 

This  account  shall  include  interest  on  all  short-term  obligations  of 
the  accounting  company,  such  as  notes  or  loans  for  terms  of  less  than 
one  year,  unpaid  taxes,  consumers'  deposits,  or  other  accounts  payable, 
etc.  It  shall  also  include  interest  on  advances  from  affiliated  companies 
(see  balance  sheet  account  No.  241,  "Advances  from  Affiliated  Com- 
panies ")  ;  and  interest  on  receiver's  certificates  which  mature  in  one 
year  or  less  after  date  of  issue. 

433.  Amortization  of  Debt  Discount  and  Expense. 

This  account  shall  include  for  any  fiscal  i^eriod  that  proportion  of 
the  unamortized  discount  and  expense  on  outstanding  debt  which  is 
applicable  to  the  period.     This  proportion  shall  be  determined  accord- 


64  INCOME    ACCOUNTS 

ing  to  a  rule  the  uniform  application  of  which  during  the  interval  be- 
tween the  issue  and  the  maturity  of  any  debt  will  completely  amortize 
or  wipe  out  the  discount  at  which  such  debt  was  issued  and  the  debt 
expense  connected  therewith. 

434.  Amortization  of  Premium  on  Debt — Cr. 

This  account  shall  include  for  any  fiscal  period  the  proportion  of  the 
premium  at  which  outstanding  debt  was  issued  which  is  applicable  to 
the  period.  This  proportion  shall  be  determined  according  to  a  rule  the 
uniform  application  of  which  during  the  interval  between  the  issue  and 
the  maturity  of  any  debt  will  completely  amortize  or  wipe  out  the 
premium  at  which  such  debt  was  issued. 

435.  Miscellaneous  Amortization  Chargeable  to  Income. 

This  account  shall  include  such  amounts  as  the  accounting  company 
may  be  required  to  charge  to  income  in  amortization  of  intangible  book 
value  or  other  items  carried  among  its  assets. 

436.  Miscellaneous  Deductions  from  Gross  Corporate  Income. 

This  account  shall  include  all  contractual  deductions  from  gross  cor- 
porate income  not  provided  for  in  any  of  the  foregoing  accounts.  This 
covers  unsecured  accruals  of  obligations  arising"  under  contracts  where- 
by the  accounting  company  has  guaranteed  the  annual  or  more  frequent 
periodic  payment  of  money  or  performance  of  other  obligation  on  the 
part  of  another  corporation  or  person  and  because  of  the  default  of 
such  other  corporation  or  j>erson  the  liability  of  the  accounting  com- 
pany has  become  actual ;  losses  resulting  from  the  operations  of 
others  whenever  in  accordance  with  the  terms  of  any  contract  the 
accounting  company  is  bound  to  contribute  toward  reimbursement  of 
such  losses ;  and  income  taxes  levied  upon  bondholders  and  assumed 
by  the  accounting  company. 

441.  Sinking-  Fund  Appropriations. 

This  account  shall  include  such  amounts  as  are  required  by  mortgage 
provision  or  otherwise  to  be  charged  to  income  for  the  purpose  of 
retiring  or  reducing  the  bonded  or  other  obligations  of  the  account- 
ing company.  It  shall  also  include  such  accretions  from  the  invest- 
ments of  funds  specifically  set  aside  for  the  above  described  pur- 
pose as  are  required  to  be  added  to  a  sinking  fund  reserve.  (.See  also 
account  No.  425,   "  Income  from   .S]X'cial   Funds.") 

442.  Dividend  Appropriations  of  Income. 

This  account  shall  inchule  .amounts  declared  ])ayable  as  dividends  out 
of  the  income  for  the  i:)eriod   for  which  the  income  account  is  stated 


INCOME   ACCOUNTS  65 

on  actually  outstanding  capital  stock  issued  or  assumed  by  the  ac- 
counting company. 

This  account  shall  be  subdivided  so  as  to  show  separately  the  divi- 
dends on  the  various  classes  of  capital  stock. 

If  the  dividend  is  not  payable  in  cash,  the  consideration  shall  be 
described  in  the  entry  with  sufficient  particularity  to  identify  it. 

Note. — This  account  shall  not  include  charges  for  dividends  on  capital  stock 
issued  or  assumed  by  the  accounting  company  and  owned  by  it  whether  held  in 
the  treasury,  in  special  deposits,  in  sinking  or  other  reserve  funds,  or  pledged  as 
collateral. 

443.    Miscellaneous  Appropriations  of  Net  Income. 

This  account  shall  include  all  appropriations  of  net  income  not  pro- 
vided for  in  the  three  preceding  accounts.  This  covers  appropriations 
of  income  to  special  fund  reserves.  (See  account  No.  425,  "  Income 
from  Special  Funds.") 


66  PROFIT    AND    LOSS    ACCOUNTS 


STANDARD  FORM  OF  PROFIT  AND  LOSS  ACCOUNT 

Dr.      Cr. 

Balance  at  the  beginning  of  the  fiscal  i>eriod 
Balance  transferred  from  income  account 

501.  Dividend  appropriations  of  surplus  *** 

502.  Appropriations  to  reserves  *** 

503.  Miscellaneous  credits  to  Profit  and  Loss  *** 

504.  Miscellaneous  debits  to  Profit  and  Loss  *** 
Balance  at  the  end  of  the  fiscal  period 


PROFIT    AND    LOSS    ACCOUNTS  67 

PROFIT  AND  LOSS  ACCOUNTS 

General  Instructions  and  Definitions 

1.  Profit  and  Loss  Account  Defined. 

The  Profit  and  Loss  account  is  the  collective  title  for  a  small 
group  of  accounts  which  form  the  connecting  link  between  the  in- 
come account  and  the  balance  sheet.  Its  principal  function  is  to 
explain  changes  in  the  corporate  surplus  or  deficit  during  a  given 
fiscal  period  as  effected,  first,  by  the  net  result  of  all  the  transactions 
reported  in  the  income  account;  second,  by  appropriations  of  surplus 
for  s{>ecific  purposes  made  at  the  option  of  the  accounting  company; 
and,  third,  by  special  and  unusual  transactions  or  adjustments  such  as 
are  not  regularly  recorded  in  the  income  account. 

2.  Delayed  Income  Items. 

Delayed  items  are  those  representing  transactions  which  occurred 
prior  to  the  period  covered  by  the  income  account,  but  which  were 
not  recorded  currently.  Such  items  may  be  charged  or  credited  to  the 
appropriate  income  account  for  the  fiscal  period  in  which  the  trans- 
actions are  actually  recorded.  If,  however,  the  amount  of  such  items 
is  relatively  so  large  that  its  inclusion  in  the  income  account  for  a 
single  year  would  result  in  a  seriously  abnormal  income  statement, 
and  no  provision  has  been  made  through  accruals  to  reserves  or  sus- 
pense for  anticipating  such  transactions,  the  accovmting  company  may 
distribute  the  amount,  or  any  part  thereof,  to  Profit  and  Loss. 


68  PROFIT    AND    LOSS    ACCOUNTS 


TEXT  PERTAINING  TO  PROFIT  AND  LOSS  ACCOUNTS 

501.  Dividend  Appropriations  of  Surplus. 

This  account  shall  include  amounts  declared  payable  out  of  accu- 
mulated surplus  as  dividends  on  actually  outstanding  capital  stock 
issued  or  assumed  by  the  accounting  company. 

This  account  shall  be  divided  so  as  to  show  separately  the  dividends 
on  the  various  classes  of  capital  stock. 

If  a  dividend  is  not  payable  in  cash,  the  consideration  shall  be 
described  in  the  entry  with  sufficient  particularity  to  identify  it. 

Note. — This  account  shall  not  include  charges  for  dividends  on  capital  stock 
issued  or  assumed  by  the  accounting  company  and  owned  by  it,  whether  held  in 
the  treasury,  in  special  deposits,  in  sinking  or  other  funds,  or  pledged  as  col- 
lateral. 

502.  Appropriations  to  Reserves. 

This  account  shall  include  appropriations  from  surplus  for  sink- 
ing fund  and  other  reserves  and  allotments  of  surplus  or  payment 
of  definite  amounts  from  surplus  into  sinking  fund  and  other  reserves 
under  the  terms  of  mortgages,  deeds  of  trust,  or  other  contracts;  and 
such  other  appropriations  of  surplus  to  be  set  aside  in  special  reserve 
accounts  as  the  accounting  company  may  make. 

Note. — It  is  the  intent  of  the  classification  that  a  reserve  shall  be  provided 
either  through  retirement  expense,  appropriations  from  surplus,  or  both,  sufficient 
to  cover  all  retirement  losses  that  may  reasonably  be  expected. 

503.  Miscellaneous  Credits  to  Profit  and  Loss. 

This  account  shall  include  all  credits  affecting  the  accounting  com- 
pany's surplus  or  deficit  and  not  elsewhere  provided  for,  such  as : 

Adjustments  or  cancellation  of  balance  sheet  accounts. 

Cancellation  of  balance  sheet  accounts  representing  unclaimed  wages 
and  vouchered  accounts  written  ofif  because  of  the  accounting  com- 
pany's inability  to  locate  the  creditor. 

Profit  derived  from  the  sale  of  miscellaneous  investments. 

Credits  resulting  from  adjustments  required  to  bring  to  par  securities 
issued  or  assumed  by  the  accounting  company  and  reacquired  at  a  cost 
less  than  par  value. 

Premiums  on  capital  stock  at  the  time  of  its  reacquircment.  (See 
"  Balance  Sheet  Accounts — General  Instructions  and  Definitions,"  Sec- 
tion 11,  page  5.) 


PROFIT    AND    LOSS    ACCOUNTS  69 

Unreleased  premiums  on  funded  debt  reacquired  before  maturity. 
(See  "  Balance  Sheet  Accounts — General  Instructions  and  Definitions," 
Section  12,  page  7.) 

Note. — If  old  accounts  are  collected  which  have  been  previously  written  ofif 
as  uncollectible,  the  amount  received  should  be  credited  to  the  account  which 
was  originally  charged  when  the  amount  in  question  was  written  off,  and  not  to 
"  Profit  and  Loss." 

504.    Miscellaneous  Debits  to  Profit  and  Loss. 

This  account  shall  include  all  debits  afifecting  the  accounting  com- 
pany's surplus  or  deficit  and  not  elsewhere  provided  for,  such  as : 

Adjustments  or  cancellation  of  balance  sheet  accounts. 

Losses  or  deficits  not  properly  chargeable  to  income  and  for  which 
no  reserve  has  been  provided. 

Losses  resulting  from  the  sale  of  miscellaneous  investments,  and 
debits  resulting  from  adjustments  required  to  bring  to  par  securities 
issued  or  assumed  by  the  accounting  company  and  reacquired  at  a  cost 
exceeding  the  par  value. 

Unextinguished  discounts  on  funded  debt  reacquired  before 
maturity. 

Donations  to  charitable  institutions  and  organizations  for  promoting 
social  welfare. 

Penalties  and  fines  for  violations  of  law. 


70  OPERATING    REVENUE   ACCOUNTS 


OPERATING  REVENUE  ACCOUNTS 

Sales  of  Current: 

601.  Metered  sales  to  general  consumers. 

602.  Flat-rate  sales  to  general  consumers. 
'603.     Railroad  corporations. 

604.  Other  electrical  corporations. 

605.  Municipal  street  lighting. 

606.  Miscellaneous  municipal  sales. 

Miscellaneous  Revenue: 

611.  Commissions  on  others'  electric  energy. 

612.  Rent  from  electric  appliances. 

613.  Rent  from  property  used  in  operation. 

614.  Merchandise  and  jobbing. 

615.  Miscellaneous  operating  revenues. 


OPERATING   REVENUE   ACCOUNTS  71 


OPERATING  REVENUE  ACCOUNTS 
General  Instructions  and  Definitions 
1     Operating-  Revenue  Accounts  Defined. 

Operating  revenue  accounts  are  those  in  which  are  recorded  the 
amounts  which  the  accounting  company  receives  or  becomes  lawfully 
entitled  to  recover  for  services  rendered,  for  products  or  merchan- 
dise sold,  as  a  return  on  property  used  in  the  company's  own  opera- 
tions, and  as  interest  on  current   funds,  such  as  daily  bank  balances. 

2.  Basis  of  Credits  to  Operating  Revenue  Accounts. 

Credits  to  the  various  revenue  accounts  shall  be  made  uprn  the 
basis  of  bills  rendered  or  of  gross  prices.  Discounts  for  prompt 
payment,  corrections  of  overcharges,  over-collections  theretofore  cred- 
ited and  afterward  corrected,  authorized  abatements  and  allowances 
and  other  corrections  and  deductions  shall  be  charged  to  the  revenue 
account  to  which  they  relate. 

Note  A. — If  an  electric  corporation  desires  to  credit  its  revenue  accounts 
upon  the  basis  of  net  price  charged  to  consumers,  all  discounts  forfeited  or 
penalties  charged  for  delayed  payments  shall  be  credited  to  the  revenue  accounts 
involved  and  kept  in  such  form  as  to  permit  their  being  separately  reported. 

Note  B. — If  the  accounting  company  sells  all  or  part  of  its  electric  energy 
through  an  agent  under  contract  by  which  the  agent  pays  distribution  and  other 
expenses  and  turns  over  to  the  accounting  company  the  amount  collected  from 
sales  of  current  less  his  agent's  commission,  the  accounting  company  should 
credit  its  revenue  accounts  with  the  full  amount  collected  by  its  agent  and  charge 
the  amount  of  the  agent's  commission  to  operating  expense  account  No.  762, 
"Agents'  Commissions."  The  agent  should  credit  the  amount  of  the  commission 
received  to  operating  revenue  account  No.  611,  "Commissions  on  Others'  Electric 
Energy,"  and  credit  the  remainder  of  the  revenue  from  electric  energy  sold  on 
commission  to  the  account  of  the  company  supplying  such  energy. 

3.  Delayed  Items. 

Delayed  items  are  those  representing  transactions  which  occurred 
prior  to  the  period  for  which  a  revenue  account  is  stated,  but  which 
were  not  recorded  currently.  Such  items  may  be  charged  or  credited  to 
the  appropriate  revenue  account  for  the  fiscal  period  in  which  the  trans- 
actions are  actually  recorded.  If,  however,  the  amount  of  such  items 
is  relatively  so  large  that  its  inclusion  in  the  revenue  accounts  for  a 
single  year  would  result  in  a  seriouslv  abnormal  income  statement  and 
no  provision  has  been  made  through  accruals  to  reserves  or  susi>ense 
accotuits  for  anticipating  such  transactions,  the  accounting  company 
may  distribute  the  amount  or  any  part  thereof  to  Profit  and  Loss. 


72  OPERATING  REVENUE  ACCOUNTS 

4.    No  Revenue  from  Electric  Energy  Used  in  Operations  or 
Supplied  Without  Direct  Charge. 

If  the  accounting"  company  desires  to  charge  its  various  departmental 
accounts  with  the  current  used  in  such  departments  for  light  or  heat 
which  it  has  itself  generated  or  purchased  for  resale,  the  value  of  such 
current  shall  not  be  credited  to  revenue,  but  to  the  appropriate  oper- 
ating expense  account  for  "Duplicate  Charges,"  Similarly,  if  current 
is  supplied  without  direct  charge  in  accordance  with  the  terms  of  a 
municipal  or  other  contract  calling  for  limited  "free"  service,  in  accord- 
ance with  franchise  requirements,  as  compensation  for  the  services  of 
employees,  etc.,  and  it  is  desired  to  charge  the  value  of  the  current  so 
furnished  to  appropriate  operating  expense  accounts,  the  concurrent 
credit  shall  be,  not  to  a  revenue  account,  but  to  "Duplicate  Charges." 


OPERATING  EXPENSE  ACCOUNTS  73 


TEXT  PERTAINING  TO  OPERATING  REVENUE 
ACCOUNTS 

601.  Metered  Sales  to  General  Consumers. 

This  account  shall  include  all  revenues  received  for  measured  electric 
energy  supplied  for  residential,  commercial,  and  industrial  purposes 
where  the  total  receipt  is  dependent  upon  quantity  of  energy  supplied, 
except  revenues  from  the  sale  of  electric  energy  to  municipal  corpora- 
tions and  other  governmental  agencies  at  rates  not  available  to  non- 
municipal  users. 

Note. — This  account  may  be  subdivided  to  show  the  sales  of  electric  energy 
for  residential,  commercial,  and  industrial  purposes,  by  tarifif  schedules,  or  other- 
wise, as  local  conditions  may  require. 

602.  Flat-Rate  Sales  to  General  Consumers. 

This  account  shall  include  all  revenues  received  for  electric  energy 

supplied  at  flat  rates  per  year,  per  night,  per  hour,  or  other  time  unit, 

or  on  any  basis  independent  of  the  quantity  of  current  supplied,  except 

revenues   from  the  sale  of   electric   energy  to  municipal   corporations 

and  other  governmental  agencies  at  rates  not  available  to  non-municipal 

users. 

Note. — This  account  may  be  subdivided  to  show  the  sales  of  electric  energy 
for  residential,  commercial,  and  industrial  purposes,  by  tariff  schedules,  or  other- 
wise, as  local  conditions  may  require. 

603.  Railroad  Corporations. 

This  account  shall  include  all  revenues  derived  from  sales  of  electric 
energy  to  railroad  corporations  for  the  propulsion  of  their  cars.  If 
such  energy  is  incidentally  used  for  other  purposes,  but  the  portion  so 
tised  is  not  separately  measured,  the  revenue  therefrom  shall  be  in- 
cluded in  this  account.  Reventie  from  the  sales  of  current  to  railroad 
corporations  at  established  tariff  rates  for  lighting  or  heating  stations, 
offices,  etc.,  or  for  power  in  shops  shall  not  be  credited  to  this  account 
but  to  the  appropriate  commercial  lighting  or  power  account. 

604.  Other  Electrical  Corporations. 

This  account  shall  include  all  revenues  derived  from  electric  energy 
sold  to  other  electrical  corporations  to  be  by  them  distributed  over  their 
own  lines  to  consumers.  If  any  portion  of  such  energy  is  incidentally 
consumed  by  such  corporations  for  their  own  benefit,  whether  for  light, 
beat  or  power,  it  shall  be  included  herein  if  not  separately  measured 
or  if  included  under  the  same  contract  with  that  which  is  distrilntted 
bv  them  to  consumers. 


74  OPERATING  EXPENSE  ACCOUNTS 

605.  Municipal  Street  Lighting. 

This  account  shall  include  all  revenues  derived  from  lighting  streets 
for  municipal  coriX)rations  by  means  of  electric  energy,  or  from  sup- 
plying electric  energy  therefor  at  special  rates  not  available  to  non- 
municipal  consumers. 

Note. — In  the  foregoing  account  the  word  "  streets "  is  to  be  interpreted  to 
inckide  parks,  plazas,  and  all  other  public  places  not  classified  as  buildings. 

606.  Miscellaneous  Municipal  Sales. 

This  account  shall  include  all  revenues  derived  from  energy  supplied 
to  municipal  corporations  for  purposes  other  than  street  lighting  at 
si)ecial  rates  not  available  to  non-municipal  consumers ;  also  all  revenues 
from  energy  supi)lied  under  special  contract  with  federal,  state  or 
county  governments. 

611.  Commissions  on  Others'  Electric  Energy. 

This  account  shall  include  all  revenues  accruing  to  the  accounting 
company  for  transmitting  or  distributing  current  of  other  companies 
over  its  transmission  or  distribution  lines  and  selling  the  same,  and  for 
all  other  services  performed  in  connection  therewith,  (See  "Operating 
Revenue  Accounts — General  Instructions  and  Definitions,"  Section  2, 
Note  B,  page  71.) 

612.  Rent  from  Electric  Appliances. 

This  account  shall  include  all  revenues  derived  from  the  leasing  of 
electric  motors,  fans,  heating  appliances,  batteries,  lamps,  meters  and 
other  electric  apparatus  and  appliances.  Where  the  contract  of  lease 
names  only  a  single  consideration  for  both  the  leasing  and  the  main- 
tenance of  the  appliances  so  let,  the  entire  revenue  shall  be  included  in 
this  account. 

613.  Rent  from  Property  Used  in  Operation. 

This  account  shall  include  rents  received  for  the  use  by  others  of 
buildings,  land,  and  other  property  devoted  to  electric  o^X'rations  by 
the  accounting  company.  This  covers  such  matters  as  rent  from  jxdIc 
attachments,  rent  from  joint  use  of  office  buildings  or  sub-stations,  rent 
from  land  included  with  water  rights,  etc. 

When  any  corporation  engages  in  electric  operations  for  the  pro- 
duction of  some  of  its  product  for  the  benefit  of  another  or  others 
under  an  arrangement  for  apportioning  the  expense  among  the  several 
participants  in  the  arrangement,  if  such  arrangement  ]>r()vides  for  the 
receipt  by  tin-  accounting  company  of  any  profit  or  return  upon  its 
property',  such  profit  or  return  upon  property  shall,  as  it  accrues,  be 


OPERATING  EXPENSE  ACCOUNTS  75 

credited  to  this  account.  Such  profit  or  return  must  be  over  and  above 
any  provision  for  wear  and  tear  and  retirement  expense  on  plant  in- 
volved in  said  production,  and  the  amount  thereof  must  be  as  provided 
in  the  arrangement  under  which  the  joint  production  occurs. 

614.  Merchandise  and  Jobbing-. 

To  this  account  shall  be  credited  all  revenues  derived  from  the  sale 
of  electric  merchandise  and  from  electric  jobbing.  To  this  account 
shall  be  charged  the  cost  to  the  accounting  company  of  such  merchan- 
dise sold,  including  transportation  costs,  and  the  cost  of  labor  em- 
ployed in  merchandise  and  jobbing  work  so  far  as  it  is  the  practice  of 
the  accounting  company  to  segregate  such  labor  costs ;  also  discounts 
and  allowances  made  in  connection  with  settlement  of  bills  for  mer- 
chandise and  jobbing. 

To  this  account  shall  also  be  credited  the  profit  or  commission  accru- 
ing to  the  accounting  company  on  all  wiring  and  jobbing  work  per- 
formed by  it  as  agent  under  agency  contracts  whereunder  it  undertakes 
to  do  jobbing  work  for  another  for  a  stipulated  profit  or  commission. 

NoTs;  A. — The  accounting  company  should  keep  this  account  in  such  detail  as 
to  enable  it  to  analyze  the  credits  and  debits  in  its  annual  reports. 

Note  B. — This  account  does  not  include  receipts  from  the  sale  of  superseded 
equipment  or  of  junk  or  other  scrap  or  salvage.  Such  receipts  should  be  credited 
to  the  account  to  which  the  cost  of  the  superseded  equipment  is  charged  or  (in 
the  case  of  the  sale  of  junk,  etc.)  to  account  No.  781,  "Undistributed  General 
Expenses,"  or  the  appropriate  subdivision  thereof. 

Note  C. — If  the  accounting  company  sells  merchandise  or  does  jobbing  work 
at  or  below  cost  for  the  purpose  of  inducing  greater  use  of  electric  energy,  a 
debit  balance  in  this  account  due  to  such  a  practice  shall  be  charged  to  operating 
expense  account  No.  771,  "New  Business  Expenses,"  or  the  appropriate  sub- 
division thereof. 

Note  D. — If  the  accounting  company  is  engaged  in  merchandising  or  jobbing 
primarily  for  direct  profit  rather  than  for  stimulating  the  consumption  of  electric 
energy,  such  merchandising  and  jobbing  may  be  organized  and  accounted  for  as 
a  distinct  department  of  the  accounting  company  co-ordinate  with  the  electric 
department. 

615.  Miscellaneous  Operating-  Revenues. 

This  account  shall  include  all  revenues  derived  from  electric  opera- 
tions not  includible  in  any  of  the  foregoing  accounts.  This  covers  such 
items  as  profit  on  the  sale  of  materials  and  supplies  not  ordinarily  pur- 
chased for  resale,  sale  of  exhaust  steam,  sale  of  water  or  hydraulic 
power,  interest  on  daily  bank  balances,  etc. 

Note. — The  foregoing  account  is  intended  to  be  restricted  to  revenues  inci- 
dental to  electric  operations.  If  the  sale  of  water  or  steam  for  steam  heating 
or  the  sale  of  power  is  of  considerable  magnitude,  it  should  be  accounted  for 
under  separate  departmental  accounts. 


76 


OPIiKATING  EXPENSE  ACCOUNTS 


OPERATING  EXPENSE  ACCOUNTS 
700  Production  Expenses 

Steam  Power  Generation 

Superintendence  and  labor 
Superintendence 
Boiler  labor 
Engine  labor 
Electrical  labor 
Miscellaneous  labor 
Power  plant  supplies  and  expenses 
Fuel 
Water 

Miscellaneous  supplies  and  expenses 
Lubricants 
Production  supplies 
Station  expense 

Maintenance  of  power  plant 

Maintenance  of  station  buildings 

Maintenance  of  steam  equipment 
Maintenance  of  furnaces  and  boilers 
Maintenance  of  boiler  apparatus 
Maintenance  of  steam  accessories 
Maintenance  of  steam  engines 
Maintenance  of  turbo-gener         luiits 

Maintenance  of  electrical  equipment 
Maintenance  of  main  generators 
Maintenance  of  exciting  apparatus 
Maintenance  of  control  and  protective  equipment 
Maintenance    of    transformers    and    converting 
apparatus 

Maintenance  of  miscellaneous  power  plant  equip- 
ment 

Steam  generated — ApiX)rtionment  account 
Steam  from  other  sources 

Hydro-Electric  Generation 

Superintendence  and  lal)or 
A  706.1  Superintendence 


Operation: 

D  C  B      701 

A  701. 

1 

.    A  701. 

2 

A  701. 

3 

A  701. 

4 

A  701. 

5 

D             702 

CBA702. 

1 

CBA702.2 

CB     702. 

3 

A  702. 

31 

A  702. 

,32 

A  702. 

,33 

Maintenance: 

D             703 

CBA703, 

.1 

CB     703. 

,2 

A  703, 

.21 

A  703. 

22 

A  703, 

.23 

A  703, 

.24 

A  703, 

,25 

C  B     703 . 

3 

A  703, 

.31 

A  703, 

.32 

A  703, 

.33 

A  703, 

,34 

CBA703.4 

D  C  B  A  704 

D  C  T^.  A  705 

Operation: 

D  C  B      706 

OPERATING  EXPENSE  ACCOUNTS 


77 


A  706.2 
A  706.3 
A  706.4 
D  707 

CBA707.1 
CB      707.2 
A  707.21 
A  707.22 
A  707. 23 

Maintenance: 

D  708 

C  B  A  708.1 
C  B      708.2 
A  708.21 
A  708.22 
A  708.23 
A  708.24 
A  708.25 
A  708.26 
A  708.27 
CB     708.3 
A  708.31 
A  708.32 
A  708.33 
A  708.34 
A  708.35 

A  708.36 

C  B  A  708.4 


Hydro-electric  labor 
Station  labor 
Miscellaneous  labor 
Power  plant  supplies  and  expenses 
Water  for  power 
Miscellaneous  supplies  and  expenses 

Lubricants 

Production  supplies 

Station  expense 

Maintenance  of  power  plant 

Maintenance  of  station  buildings 

Maintenance  of  reservoirs,  dams  and  waterways 
Maintenance  of  reservoirs,  dams  and  intakes 
Maintenance  of  navigation  facilities 
Maintenance  of  waterways 

Maintenance  of   forebays,  penstocks  and  tail-races 
Maintenance  of  way  and  cars 
Maintenance  of  telephone  system 
Maintenance  of  production  roads  and  trails 

Maintenance  of  hydro-electric  equipment 

JMaintenance  of  water  turbines  and  water  wheels 
Maintenance  of  turbo-generator  units 
Maintenance  of  main  generators 
]\Iaintenance  of  exciting  apparatus 
Maintenance   of    control    and    protective    equip- 
ment 
Maintenance    of    transformers    and    converting 
apparatus 

Maintenance  of  miscellaneous  power  plant  equip- 
ment 


Operation: 

D  C  B  709 
A  709.1 
A  709.2 
A  709.3 
A  709.4 
A  709.5 

D  710 


Gas  Generation 

Superintendence  and  labor 

Superintendence 

Fuel  labor 

Engine  labor 

Electrical  labor 

Miscellaneous  labor 
Power  plant  supplies  and  expenses 


78  OPEKATliNG   EXPENSE  ACCOUNTS 


Engine  fuel 

Miscellaneous  supplies  and  exj^enses 

Water 

Lubricants 

Production  supplies 

Station  exj>ense 


Maintenance  of  power  plant 

Maintenance  of  station  buildings 
Maintenance  of  gas  equipment 

Maintenance    of    fuel    holders,    producers    and 

accessories 
Maintenance  of  engines  and  turbines 
Maintenance  of  electric  equipment 
Maintenance  of  main  generators 
Maintenance  of  exciting  apparatus 
Maintenance  of  control  and  protective  apparatus 
Maintenance    of    transformers    and    converting 
apparatus 
Maintenance  of  miscellaneous  power  plant  equip- 
ment 
Power  gas  from  other  sources 

Miscellaneous  Production  Accounts 

Electric  energy  from  other  sources 
Duplicate  production  charges — Cr. 
Production  expenses  transferred — Cr. 

Transmission  Expenses 

Transmission  operation  and  maintenance 

Superintendence 

Substation  labor 

Substation  supplies  and  expenses 

Operation  of  transmission  lines 

Eabor  and  expense — underground  conduits 
Labor  and  expense — ^xjles,  towers  and  fixtures 
Labor  and  expense — overhead  conductors 
Labor  and  expense — underground  conductors 
Miscellaneous  supplies  and  expenses 

Maintenance  of  structures 

Maintenance  of  substation  equipment 


CBA710 

.1 

CB     710, 

,2 

A  710 

.21 

A  710 

.22 

A  710.23 

A  710.24 

Maintenance: 

D             711 

CBA711 

.1 

CB     711, 

.2 

A711 

.21 

A  711 

.22 

CB     711, 

,3 

A711 

.31 

A711 

.32 

A711 

.33 

A711 

.34 

CBA711 

.4 

DCBA712 

DCBA713 

DCB  A714 

DCBA715 

720 

D             721 

CBA721. 

.1 

CBA721 

2 

C  B  A  721 , 

.3 

CB     721. 

4 

A  721, 

.41 

A  721 

.42 

A  721 

.43 

A  721 

.44 

A  721 

.45 

C  B  A  721 

.5 

C  B  A  721 

.6 

OPERATING  EXPENSE  ACCOUNTS  79 

C  B  A  721 .7  Maintenance  of  underground  conduits 

CB      721. is  Maintenance  of  transmission  lines 

A  721.81  Maintenance  of  poles,  towers,  and  fixtures 

A  721.82  Maintenance  of  overhead  conductors 

A  721. 83  Maintenance  of  underground  conductors 

CB  A  721.9  Maintenance  of  roads  and  trails 

730  Distribution  Expenses 

731  Distribution  operation  and  maintenance 
CBA731.1  Superintendence 

CB      731.2  Substation  expenses 

A  731,21  Substation  labor 

A  73 1.22  Substation  supplies  and  expenses 

CB      731.3  Storage  battery  expenses 

A  731 .31  Storage  battery  labor 

A  731.32  Storage  battery  supplies  and  expenses 

CB      731.4  Operation  of  distribution  lines 

A  731 .41  Labor  and  expense — underground  conduits 

A  731 .42  Labor  and  expense — ix)les,  towers,  and  fixtures 

A  73 1.43  Labor  and  expense — overhead  conductors 

A  731.44  Labor  and  expense — underground  conductors 

A  731 .45  Miscellaneous  supplies  and  expenses 

CB      731.5  Meter  and  transformer  operation 

A  731.51  Salaries  and  expenses — meter  department 

A  731.52  Testing  meters 

A  731.53  Miscellaneous  expenses — meter  department 

A  731 .54  Removing  and  resetting  meters 

A  731 .55  Removing  and  resetting  transformers 

C  B  A  732. 1  Maintenance  of  structures 

C  B  A  732.2  Maintenance  of  substation  eciuipment 

C  B  A  732.3  Maintenance  of  storage  battery  equipment 

C  B  A  732.4  Maintenance  of  underground  conduits 

CB      732.5  Maintenance  of  distribution  lines 

A  732. 51  Maintenance  of  poles,  towers,  and  fixtures 

A  732,52  Maintenance  of  overhead  conductors 

A  732,53  Maintenance  of  underground  conductors 

C  B  A  732 . 6  Maintenance  of  services 

CB      732.7  Maintenance  of  transformers  and  meters 

A  732.71  Maintenance  of  line  transformers 

A  732.72  Maintenance  of  consumers'  meters 


80  OPERATING  EXPENSE  ACCOUNTS 


750 

D     751 

CB  751. 

1 

A  751. 

11 

A  751. 

12 

A  751. 

13 

CB  751. 

2 

A  751. 

,21 

A  751, 

,22 

CB  751. 

3 

A  751 

,31 

A  751, 

,32 

A  751, 

.33 

CBA751, 

A 

CB  751. 

,5 

A  751, 

.51 

A  751, 

.52 

760 

DC    761 

B  A  761 , 

.1 

B  761. 

2 

A  761 

.21 

A  761 

.22 

B  761. 

,3 

A  761 

.31 

A  761 

.32 

B  A  761 , 

.4 

D  C  B  A  762 

770 

DC    771 

B  771, 

,1 

A  771 

.11 

A  771 

.12 

B  771 

.2 

A  771 

.21 

A  771 

.22 

A  771 

.23 

A  771 

.24 

A  771 

.25 

Utilization 

Utilization  operation  and  maintenance 
Commercial  lamps — operation 

Commercial  arc  lamps 

Incandescent  lamps — installation 

Incandescent  lamps — renewals 
Consumers'  installation  and  inspection  work 

Inspection — consumers'  premises 

Consumers'  installations 
Municipal  street  lamps — operation 

Municipal  street  arc  lamps 

Municipal  street  incandescent  installation 

Municipal  street  incandescent  renewals 
Maintenance  of  commercial  lamps 
Maintenance  of  municipal  street  lighting  equipment 

Maintenance  of  municipal  street  arc  lamps 

Maintenance    of    municipal    street   incandescent 
lamps 

Commercial  Expenses 

Commercial  administration 
Commercial  general  labor 
Commercial  books  and  contracts 

Commercial  bookkeeping 

Commercial  contracts 
Commercial  meter  reading  and  collecting 

Commercial  collecting 

Meter  reading 
Commercial  supplies  and  expenses 
Agents'  commissions 

New  Business  Expenses 

New  business  expenses 
New  business  salaries 

New  business  management  salaries 

New  business  advertising  salaries 
New  business  supplies  and  expenses 

Demonstrations 

Wiring  and  appliances 

Advertising  supplies  and  expenses 

Canvassing  and  soliciting 

Miscellaneous  new  business  supplies  and  expenses 


780 

D     781 

C  B   781 , 

.1 

A  781 

.11 

A  781 

.12 

C    781 

.2 

B  A  781 , 

.21 

B  A  781 , 

,22 

B  A  781 . 

.23 

B  A  781 . 

,24 

B  A  781 . 

.25 

B  A  781 , 

.26 

B  A  781 . 

27 

B  A  781 . 

.28 

B  A  781 . 

29 

BA781. 

.30 

BA781. 

31 

B  A  781 . 

32 

D  C  B  A  782 

D  C  B  783 

A  783, 

,1 

A  783, 

.2 

A  783, 

.3 

A  783.4 

A  783, 

.5 

D  C  B  A  784 

D  C  B  785 

A  785. 

.1 

A  785. 

.2 

D  C  B  A  786 

D  C  B  A  787 

D  C  B  A  788 

D  C  B  A  789 

D  C  B  A  790 

OPERATING   EXPENSE  ACCOUNTS  81 

General  Miscellaneous  Expenses 

Undistributed  general  expenses 
General  office  salaries 
Administrative  salaries 
Other  general  office  salaries 
Miscellaneous  general  expenses 

General  office  supplies  and  expenses 
General  stationery  and  printing 
Maintenance  of  general  structures 
Operation  of  communication  system 
Maintenance  of  communication  system 
Law  expenses 
Insurance 
Store  expenses 
Transportation  expenses 
Undistributed  adjustments 
Rentals 

Other  miscellaneous  general  expenses 
Retirement  expense 
Injuries  and  damages 

Claim  department  expenses 
Medical  expenses 
Injuries  to  employees 

Other  personal  injuries  and  property  damage 
Miscellaneous  accident  expenses 
Regulatory  commission  expenses 
Relief  and  welfare  work 

Employees'  welfare  department 
Pensions 
Franchise  requirements 
Amortization  of  franchises 
Electric  expenses  transferred — Cr. 
Joint  operating  expenses — Cr. 
Duplicate  miscellaneous  charges — Cr. 


82  OPERATING   EXPENSE  ACCOUNTS 


OPERATING  EXPENSE  ACCOUNTS 

General  Instructions  and  Definitions 

1.  Operating  Expenses  Defined. 

The  term  operating  expenses  as  used  in  this  classification  means  such 
expenses  as  are  necessary  to  the  maintenance  of  the  corporate  organiza- 
tion, the  rendering  of  service  required  or  authorized  by  law,  the  sale  of 
merchandise,  the  production  (including  herein  the  cost  of  capital  con- 
sumed) and  disposition  of  commodities  produced,  and  the  collection  of 
the  revenues  therefor.  Expenses  directly  incident  to  the  collection  of 
non-operating  revenues  and  the  maintenance  of  property  from  which 
non-operating  revenues  are  derived  are .  excluded  from  operating 
expenses. 

2.  Definitions  of  Certain  Terms  Used  in  Connection  witH 

Expense  Accounts. 

Except  where  some  other  meaning  is  clearly  specified  in  the  defini- 
tions of  the  accounts,  the  following  words,  wherever  used  hereunder 
have  the  meanings  below  stated. 

Cost  means  cash  or  money  cost,  and  not  price  based  on  a  term  of 
credit. 

Labor  means  human  services  of  whatever  character. 

Cost  of  labor  includes  wages,  salaries,  and  fees  paid  to  persons  for 
their  services. 

Cost  of  materials  and  supplies  includes  all  specifically  assignable 
transportation  charges  incurred  in  obtaining  the  delivery  of  such  mate- 
rials and  supplies  upon  the  premises  of  the  purchaser,  such  as  packing, 
drayage,  freight,  insurance,  customs  duties,  commissions,  etc.,  and  cost 
of  any  special  tests  made  thereon  prior  to  their  acceptance;  and  in  case 
the  accounting  person  or  corporation  desires,  it  may  include  a  suitable 
proportion  of  store  expenses  (when  the  materials  and  supplies  are 
passed  through  stores)  and  the  cost  of  further  transportation  to  the 
place  of  consumption,  and  a  suitable  proportion  of  the  expenses  of  the 
purchasing  department,  in  which  case  a  corresponding  credit  shall  be 
made  to  the  suitable  expense  account  as  hereinafter  provided. 

Cost  of  repairs,  when  made  by  the  accounting  person  or  corporation, 
includes  cost  of  labor  expended  and  material  consumed,  and  incidental 
expenses  such  as  carfare,  permits,  inspection,  etc.,  less  salvage,  if  any. 


OPERATING  EXPENSE  ACCOUNTS  83 

Cnrrent  niaintcuancc  includes  such  expenses  necessary  to  maintain 
the  tangible  proi>erty  in  a  state  of  operating  efficiency  as  do  not  result 
in  a  substantial  change  of  identity  in  any  particular  unit  of  proi>erty. 
It  includes  the  cost  of  minor  replacements  of  small  parts  commonly 
called  the  cost  of  repairs,  but  it  does  not  include  the  cost  of  replacing 
individual  structures,  facilities  or  units  of  equipment  or  important 
sections  of  continuous  structures  such  as  electric  line.  Current  main- 
tenance costs  are  chargeable  to  operating  expenses  and  wherever  the 
word  "  maintenance  "  is  used  in  the  definition  of  an  operating  expense 
account  current  maintenance  is  to  be  understood.  The  cost  of  replacing 
the  larger  units  is  chargeable  to  fixed  capital  from  which  the  cost  of 
the  property  replaced  must  be  deducted. 

Note. — It    is    not    required    that    the    transportation    element    of    cost    shall  be 

assigned  with  a  greater  degree  of  accuracy  than  to  the  nearest  cent  per  unit  of 

material   or   supply.     Where   a   single   transportation   item   covers   a   multitude  of 

things    the    portion    of    the    expense    not    assigned    to    specific    things    should  be 
charged  to  the  same  account  that  store  expenses  are  charged  to. 

3.  Unaudited  Bills  and  Vouchers. 

When  bills  covering  operating  expense  items  are  not  received  in  time 
for  audit,  and  when  vouchers  are  not  made  in  time  for  inclusion  in  the 
operating  accounts  for  the  month  in  which  the  transactions  occur,  the 
items  may  be  estimated  and  in  such  form  charged  or  credited  to  oper- 
ating accounts,  and  credited  or  charged  to  operating  reserves,  the  neces- 
sary adjustments  being  made  later  when  the  bills  and  vouchers  are 
taken  into  the  accounts. 

4.  Delayed  Items. 

Delayed  items  are  those  representing  transactions  which  occurred 
prior  to  the  period  covered  by  the  income  account,  but  which  were  not 
recorded  currently.  Such  items  may  be  charged  or  credited  to  the 
appropriate  expense  account  for  the  fiscal  period  in  which  the  transac- 
tions are  actually  recorded.  If,  however,  the  amount  of  such  items  is 
relatively  so  large  that  its  inclusion  in  the  expense  accounts  for  a  single 
year  would  result  in  a  seriously  abnormal  income  statement,  and  no 
provision  has  been  made  through  accruals  to  reserves  or  suspense  ac- 
counts for  anticipating  such  transactions,  the  accounting  company  may 
distribute  the  amount  or  any  part  thereof  to  Profit  and  Loss. 

5.  Salvage  and  Insurance. 

Salvage  and  insurance  received  in  connection  with  maintenance  jobs 
not  involving  deductions    from   fixed   capital   shall   be   credited   to   the 


84  OPERATING  EXPENSE  ACCOUNTS 

appropriate  maintenance  account.  (See  "Fixed  Capital  Accounts — 
General   Instructions  and  Definitions,"   Section  6,   Page  32.) 

If  the  insurance  on  damaged  property  is  relatively  large,  and  is 
received  before  the  repairs  have  been  completed,  a  disproportionate 
credit  to  operating  expenses  may  be  avoided  by  crediting  the  amount 
of  the  insurance  recovered  to  a  suspense  account  to  w^hich  the  cost  of 
the  repair  shall  then  be  charged  to  the  extent  that  it  is  covered  by 
insurance. 

Insurance  recovered  in  connection  witlT  personal  injuries  shall  be 
credited  to  account  No.  783,  "  Injuries  and  Damages  "  or  the  appro- 
priate sub-division  thereof.  Dividends  distributed  by  mutual  insurance 
companies  shall  be  credited  to  the  account  to  which  the  insurance  pre- 
mium is  charged.  Recoveries  under  fidelity  bonds  shall  be  credited  to 
the  account  charged  with  the  loss. 

6.  Retirement  Expense. 

An  account  is  provided  in  which  to  include  charges  made  in  order 
that  corporations  may,  through  the  creation  of  adequate  reserves,  equal- 
ize from  year  to  year,  as  nearly  as  is  practicable,  the  losses  incident  to 
important  retirements  of  buildings,  dams,  etc.,  or  of  large  sections  of 
continuous  structures  like  electric  line,  or  of  definitely  identifiable  units 
of  plant  or  equipment.  "  Losses  "  used  above  means  in  each  case  the 
excess  of  the  original  cost  to  the  accounting  company  of  the  property 
retired  plus  the  cost  of  dismantling  or  removing,  over  its  salvage  value 
at  the  time  of  its  retirement.  The  cost  of  replacing  minor  parts,  which 
is  not  recorded  by  any  entries  in  the  fixed  capital  accounts,  and  which 
is  commonly  called  the  cost  of  "  repairs  "  or  "  maintenance  "  as  dis- 
tinguished from  the  cost  of  "  replacements  "  of  large  units,  need  not  be 
provided  for  through  a  retirement  reserve.  The  amounts  charged  to 
retirement  expense  plus  amounts  appropriated  from  surplus  should  be 
upon  a  basis  determined  to  be  equitable  according  to  the  accounting 
company's  experience  and  best  sources  of  information,  and  should  in 
all  cases  be  sufficient  to  provide  during  a  period  of  years  a  reserve 
against  which  can  be  written  ofif  all  losses  sustained  upon  the  retire- 
ment of  property  for  any  cause  whatsoever. 

7.  Classification  of  Corporations  by  Revenue. 

For  the  purpose  of  this  classification  of  accounts  electrical  corpora- 
tions are  divided  into  four  classes  as  follows : 

Class  A. — Cor|X)rations  having  average  annual  operating  revenues 
exceeding  $250,000. 


OPERATING  EXPENSE  ACCOUNTS  85 

Class  B. — Corporations  having  average  annual  operating  revenues 
exceeding  $50,000,  but  not  over  $250,000. 

Class  C. — Corixjrations  having  average  annual  operating  revenues 
exceeding  $10,000,  but  not  over  $50,000. 

Class  D. — Corporations  having  average  annual  operating  revenues 
of  $10,000  or  less. 

In  order  that  frequent  changes  in  the  classification  may  be  avoided, 
the  class  to  which  an  electrical  corporation  belongs  may  be  determined 
by  the  average  of  its  annual  revenues  for  the  three  years  next  preced- 
ing the  date  as  of  which  its  classification  is  to  be  determined.  If  at  the 
close  of  any  fiscal  year  following,  the  average  of  its  annual  revenues 
for  the  three  next  preceding  years  is  greater  than  the  maximum  for 
the  class  in  which  the  corporation  has  been  groui>ed,  it  shall  automati- 
cally be  grouped  with  the  higher  class  in  which  it  falls  by  virtue  of 
such  increased  annual  revenues.  Corporations  engaged  in  new  enter- 
prises the  annual  revenue  from  which  is  not  known  in  advance  shall 
be  classed  in  accordance  with  a  reasonable  estimate  of  their  prospective 
revenue. 

The  classification  of  operating  expenses  which  follows  is  adapted 
to  corporations  in  all  four  classes.  The  primary  accounts  are  expanded 
and  subdivided  as  will  be  indicated  to  meet  the  needs  of  each  class.  No 
separate  definitions  are  stated  for  accounts  which  are  thus  divided,  but 
the  content  of  such  accounts  is  to  be  found  in  the  definitions  of  the  final 
subdivisions.  When  such  subdivisions  are  kept  as  primary  ledger 
accounts  it  will  not  be  necessary  to  keep  also  the  account  which  has 
been  subdivided. 

Each  corporation  should  keep,  so  far  as  they  are  applicable  to  its 
business,  at  least  the  accounts  provided  for  the  class  to  which  it  belongs. 
Any  corporation  may,  however,  keep  any  or  all  of  the  accounts  of  the 
more  extended  schemes  provided  for  those  corporations  which  are  in 
higher  revenue  classes.  If  desired,  further  refinements  or  extensions 
of  the  scheme  of  accounts  to  meet  the  needs  of  individual  coriX)rations 
may  be  made  by  subdividing  the  accounts  herein  established,  provided 
that  the  integrity  of  the  recjuired  accounts  is  not  impaired. 

Each  title  in  a  condensed  classification  is  to  be  understood  to  com- 
prise the  titles  following  it  for  a  more  expanded  classification.  The 
letter  D  preceding  the  title  denotes  that  at  least  the  accounts  so  indi- 
cated must  be  kept  by  corporations  in  Class  D  so  far  as  they  are  applic- 
able to  its  business.  The  letter  C  indicates  the  accounts  that  must  be 
kept  by  Class  C  corporations,  and  so  on.  Accounts  that  are  to  be  kept 
as  primary  accounts  by  more  than  one  class  of  corporations  are  indi- 
cated by  prefixing  the  letters  of  all  the  classes  which  are  required  to 
keep  such  accounts. 


86  OPERATING  EXPENSE  ACCOUNTS 


TEXT  PERTAINING  TO  OPERATING  EXPENSE 
ACCOUNTS 

GENERAL  ACCOUNTS 

700.  Production  Expenses 

720.  Transmission  Expenses 

730.  Distribution  Expenses 

750.  Utilization  Expenses 

760.  Commercial  Expenses 

770.  New  Business  Expenses 

780.  General  and  Miscellaneous  Expenses 

700    PRODUCTION  EXPENSES 

T\ToTE. — If  the  accounting  company  operates  two  or  more  generating  stations 
or  if  it  generates  energy  by  two  or  more  different  methods,  such  as  by  a  steam 
power  plant  and  a  hydrauHc  power  plant,  it  should  keep  (with  the  detail  herein 
prescribed)  separate  accounts  covering  production  at  the  several  plants  and  so 
far  as  practicable  for  each  process  or  method.  Where  two  or  more  methods 
or  processes  are  used,  separate  sub-accounts  should  be  kept  for  expenses  com- 
mon to  two  or  more  methods.  Electric  energy  obtained  from  another  company 
should  be  separately  accounted  for  as  in  the  case  of  that  produced  by  a  separate 
process  or  method. 

Steam  Power  Generation 
Operation 
D  C  B     701        Superintendence  and  Labor. 

A  701 . 1        Superintendence. 

This  account  shall  include  the  salaries  of  superintendents  and  assist- 
ants, chemists,  day  and  night  foremen,  and  station  clerks ;  and  also  that 
portion  of  the  salaries  of  the  engineering  staff  chargeable  to  steam 
generating  plant  operations. 

A  701 . 2        Boiler  Labor. 

1'his  account  shall  include  labor  in  boiler  room  and  elsewhere  in  and 
about  the  premises  having  to  do  with  making  steam. 

Principal  items :  Fire  room  engineer  and  assistants,  water  tenders, 
firemen,  coal  handlers,  boiler  cleaners,  and  feed  pumpmen. 

A  701.3        Engine  Labor. 

This  account  shall  include  labor  on  prime  movers. 
Principal   items :      Chief   engineer  and   assistants,   engineers,   oilers, 
wipers  and  machinists. 


OPEKATING  EXPENSE  ACCOUNTS  87 

A  701.4        Electrical  Labor. 

This  account  shall  include  all  labor  in  connection  with  the  electrical 
apparatus  and  devices,  beginning  with  the  dynamos  direct  connected  or 
belted  to  the  prime  movers  and  including  the  switchboard,  feeder  ter- 
minal board,  and  to  the  point  where  the  electric  current  leaves  the 
station  for  the  transmission  or  distribution  system. 

Principal  items :  System  operators  or  load  dispatchers,  foremen 
regulators,  regulators  and  assistants,  switchboard  men,  brushmeUj 
wipers,  wiremen. 

A  701 . 5        Miscellaneous  Labor. 

This  account  shall  include  salaries  and  wages  of  all  employees  in  and 
about  the  steam  power  generating  plant  engaged  in  operating  the  plant, 
whose  time  is  not  chargeable  to  any  of  the  foregoing  steam  power  plant 
labor  accounts.  This  covers  such  labor  as  that  of  watchmen,  janitors, 
elevator  men,  and  messengers,  employees  engaged  in  cleaning  buildings 
and  yards,  and  other  general  labor,  excluding  maintenance  labor. 

D  702        Power  Plant  Supplies  and  Expenses. 

CBA702.1        Fuel. 

This  account  shall  include  the  cost  of  all  fuel  used  for  steam,  whether 
coal,  oil,  gas  or  other  fuel,  f.  o.  b.  station  or  storage  pile.  This  will 
include  the  invoice  cost  of  fuel,  freight,  switching,  rent  of  railroad 
sidings,  demurrage,  cost  of  unloading  from  cars  or  boats  to  wagons, 
and  cartage  to  point  of  delivery  at  plant  for  storage,  or  unloading  from 
scows  or  cars  and  conveying  to  place  of  storage.  In  case  coal  is  trans- 
ferred from  one. place  to  another,  this  cost  should  also  be  included,  and 
any  discrepancy  between  the  actual  amount  of  coal  on  hand  and  that 
recorded  on  the  books  of  the  company  should  likewise  be  taken  care 
of  in  this  account. 

CBA702.2        Water. 

This  account  shall  include  the  cost  of  water  for  boilers,  for  conden- 
sers, and  for  cooling  engines ;  also  boiler  compound.  Water  used  for 
general  station  pur|X)ses  should  not  be  included. 

If  water  is  purchased,  charge  at  the  contract  price  or  the  meter  rate. 

If  water  is  pumped  by  the  company,  charge  here  the  cost  of  pumping. 

This  account  should  include  all  labor  cost  in  connection  with  the 
handling  of  water,  such  as  operating  the  pumping  station,  and  expense 
such  as  cost  of  chemicals  used  in  purification  and  filtration. 


88  OPERATING  EXPENSE  ACCOUNTS 

C  B     702 . 3    Miscellaneous  Supplies  and  Expenses. 
A  702 .  31      Lubricants. 

This  account  shall  include  the  cost  of  lubricants  for  machinery  in 
the  steam  generating  plant.  This  does  not  include  oil  for  transformers, 
grease  for  wagons,  or  oil  for  lanterns,  etc. 

Oil  used  in  pumping  station  should  be  charged  against  account  No. 
702.2,  "  Water." 

A 702.32      Production  Supplies. 

This  account  shall  include  the  cost  of  all  supplies,  tools,  etc.,  used  in 
the  steam  generating  plant  which  are  consumed  in  the  oi>erating  proc- 
ess, the  replacement  of  which  does  not  constitute  a  repair  or  renewal. 

Principal  items :  Waste,  packing,  wipers,  gauge  glasses,  gauge 
washers,  manhole  gaskets,  handhole  gaskets,  fire  room  tools,  steam  and 
air  hose,  boilers,  screws,  nails,  tools,  dynamo  brushes. 

A  702 .  33      Station  Expense. 

This  account  shall  include  the  general  and  miscellaneous  expenses 
in  the  steam  generating  plant  not  specifically  chargeable  to  other  ac- 
counts. 

Principal  items :  Lighting,  heating  and  cleaning  system,  fire  protec- 
tion system,  janitors'  supplies,  ice  water,  meals  and  car  fares,  station- 
ery, telephone  and  toilet  service,  care  of  streets,  yards  and  sidings. 
Minor  rents  may  be  included.  (See  General  Expense  Account  No. 
781.31,  "Rentals.") 

This  does  not  include  miscellaneous  labor,  which  is  cared  for  under 
account  No.  701.5,  "  Miscellaneous  Labor." 

Maintenance. 
D  703        Maintenance  of  Power  Plant. 

C  B  A  703 . 1        Maintenance  of  Station  Buildings. 

This  account  shall  include  the  cost  of  maintaining  steam  power  plant 
buildings  and  permanent  fixtures  therein,  including  furniture,  as 
follows : 

a.  Sundries. — Repairs  to  furniture,  fixtures,  and  other  such  prop- 
erty in  and  about  the  steam  generating  plant  not  specifically  provided 
for  elsewhere.  Alterations,  if  not  provided  for  by  a  reserve,  should  be 
charged  under  this  classification. 

b.  Station  .Structures.- — Repairs  to  buildings  and  permanent  fix- 
tures therein. 


OPERATING  EXPENSE  ACCOUNTS  89 

Principal  items:  Plumbing,  windows,  sashes,  roof,  doors  and  walls; 
heating  and  lighting  systems ;  grounds  and  streets,  vaults,  sheds,  pits, 
sidewalks,  elevators ;  lockers,  fire  protection  system,  painting. 

C  B     703 . 2        Maintenajice  of  Steam  Equipment. 
A  703.21      Maintenance  of  Furnaces  and  Boilers. 

This  account  shall  include  the  cost  of  maintaining  boilers  and  fur- 
naces and  their  specially  provided  foundations  and  settings. 

Principal  items :  Brick  work,  metal  smoke-stacks,  bridge  wall  arches, 
jambs,  grate  bars,  stoker  bars  and  webbs,  furnaces,  valves,  super- 
heaters, damper  regulators,  tubes. 

A  703 .  22      Maintenance  of  Boiler  Apparatus. 

This  account  shall  include  the  cost  of  maintaining  feed  water,  coal, 
and  ash  handling  systems,  and  auxiliary  apparatus  in  the  fireroom. 

Principal  items :  Feed  pumps,  blower  engines,  coal  conveyors,  dig- 
gers, trolley  and  cable  towers,  crusher  and  belt  lines,  brackets,  wheels, 
chutes  and  gates ;  ash  conveyor  cars,  winches,  motors,  buckets,  shaft, 
chain  and  wheels;  filters,  boiler  compound  injector  and  pump;  heaters, 
primary  and  secondary;  economizers  and  water  meters. 

A  703 .  23      Maintenance  of  Steam  Accessories. 

This  account  shall  include  the  cost  of  maintaining  the  piping  system 
in  connection  with  the  making  of  steam  and  delivery  thereof  to  the 
prime  movers.  This  covers  those  steam  accessories  included  in  fixed 
capital  account  No.  313,  "  Boiler  Plant  Equipment,"  i.  e.,  those  not 
considered  a  part  of  the  steam  engine. 

Principal  items :  Water  feed  piping,  cold  main,  hot  main,  water 
suction,  valves,  joints,  jackets,  ash  pit  drains  and  ash  pocket  siphons, 
oil  drains  from  engine  crank  pits,  receiving  tanks,  filter  pumps  to 
engine  valve,  steam  and  exhaust  line  systems,  sewer  connections  and 
air  line. 

Note. — When  the  system  for  supplying  boiler  or  condenser  water  is  elaborate, 
as  when  it  includes  a  dam.  reservoir,  canal  and  pipe  line,  the  cost  of  maintaining 
it  shall  be  charged  to  a  special  sub-account  under  account  No.  703.1,  "  Mainte- 
nance of  Station  Buildings,"  with  the  title,  "  Maintenance  of  Water  Supply 
Structures — Steam." 

A  703 .  24      Maintenance  of  Steam  Engines. 

This  account  shall  include  the  cost  of  maintaining  steam  engines, 
whether  reciprocating  or  rotary,  used  in  the  power  jjlant.  This  covers 
the  cost  of  maintaining  apparatus  auxiliary  to  the  prime  mover,  such 
as    condensers,  tubes,   heads,   doors,   etc.,  pumps,   air  and  circulating, 


90  OPERATING  EXPENSE  ACCOUNTS 

wet  vacuum,  dry  vacuum,  and  oil  systems  but  not  the  power  conveying 

api)aratus. 

Note. — This  account  may  be  sub-divided  between  the  expense  of  maintaining 
the  prime  mover  and  the  expense  of  maintaining  the  auxihary  apparatus. 

A  703 .  25      Maintenance  of  Turbo-generator  Units. 

This  account  shall  include  the  cost  of  maintaining  steam  turbine- 
driven  generating  units.  This  covers  the  cost  of  maintaining  condensers, 
air  and  circulating  pumps,  lubricating  systems  and  similar  appurtenant 
apparatus,  but  not  the  cost  of  maintaining  the  steam  pipe  leading  from 
the  boiler  nor  the  exhaust  pipe. 

Note. — This  account  may  be  sub-divided  to  show  separately  the  cost  of  main- 
taining the  prime  mover  and  the  appurtenant  apparatus. 

C  B     703.3        Maintenance  of  Electrical  Equipment. 
A  703 .  31  Maintenance  of  Main  Generators. 

This  account  shall  include  the  cost  of  maintaining  dynamos,  alter- 
nators and  other  electric  generating  apparatus  driven  by  steam. 

A 703.32  Maintenance  of  Exciting  Apparatus. 

This  account  shall  include  the  cost  of  maintaining  exciters,  motors, 
motor  generators,  boosters,  regulators  and  exciting  batteries  used  in 
the  steam  generating  plant. 

A 703.33  Maintenance  of  Control  and  Protective 

Equipment. 

This  account  shall  include  the  cost  of  maintaining  switches,  circuit 
breakers,  busses,  current  and  potential  transformers,  relays,  indicating 
and  recording  instruments  and  switchboard  panels,  lightning  arresters, 
reactances  and  ground  resistances  used  in  the  steam  generating  plant, 
and  wires  and  cables  used  in  conjunction  with  the  foregoing. 

A  703 .  34         Maintenance  of  Transformers  and  Con- 
verting Apparatus. 

This  account  shall  include  the  cost  of  maintaining  transformers  and 
converting  a])paratus  in  the  steam  generating  plant  other  than  that 
used  primarily  for  transmission  and  distribution  purposes. 

C  B  A  703 . 4        Maintenance  of  Miscellaneous  Power  Plant 
Equipment. 

This  account  shall  include  tlie  cost  of  maintaining  miscellaneous 
e([uipnK'nt,  such  as  belts,  jmlleys,  hangers,  countershafts,  machine  tools, 
cars,  locomotives,  locomotive  cranes  for  ])ower  plant  purposes,  and  all 


OPERATING  EXPENSE  ACCOUNTS  91 

other  equipment  properly  includible  in  fixed  capital  account   No.  317, 
"  Miscellaneous  Power  Plant  Equipment — Steam." 

This  account  shall  also  include  the  cost  of  maintaining  tools  and 
implements  assigned  to  the  steam  power  plant,  such  as  blacksmiths', 
machinists'  and  pipe  fitters'  tools,  pump  room  tools,  engine  tools  and 
cutting  tools. 

D  C  B  A  704        Steam  Generated — Apportionment  Account. 

This  account  will  be  raised  only  by  companies  operating,  in  connec- 
tion with  electric  utilities,  other  utilities  or  departments  which  make 
demand  upon  the  same  boiler  plant. 

Where  a  demand  of  this  character  is  made  upon  a  boiler  plant,  the 
expenses  incident  to  generating  steam  shall  be  transferred  from  the 
foregoing  accounts  to  this  account  at  the  close  of  the  period.  The 
total  cost  of  generating  steam  as  then  shown  shall  be  apportioned  to 
the  utilities  or  departments  using  the  steam,  by  credits  to  this  account. 
The  balance  remaining  in  this  account  will  represent  the  cost  of  steam 
for  generating  electric  energy. 

The  details  of  the  cost  of  generating  steam,  and  the  amounts  appor- 
tioned to  the  dififerent  utilities  or  departments  using  the  steam,  and  the 
basis  used  for  the  api>ortionment  may  be  called  for  in  the  annual  report 
to  the  regulatory  commission. 

D  C  B  A  705        Steam  from  Other  Sources. 

This  account  shall  include  the  cost  of  all  purchased  or  jointly  pro- 
duced steam  consumed  in  the  generating  plant. 

Hydro-electric  Generation 
Operation 
DOB     706        Superintendence  and  Labor. 
A  706 . 1        Superintendence. 

This  account  shall  include  the  salaries  of  superintendents  and  assist- 
ants, chemists,  day  and  night  foremen,  and  station  clerks;  and  also 
that  portion  of  the  salaries  of  the  engineering  stafif  chargeable  to 
hydro-electric  generating  plant  operations. 

A  706 . 2        Hydro-electric  Labor. 

This  account  shall  include  the  wages  of  all  employees  operating  the 
hydraulic  works,  including  foremen,  intake  operators,  flume  patrolmen, 
cleaners  at  reservoirs  and  screens  and  all  other  employees  whose  duties 


92  OPERATING  EXPENSE  ACCOUNTS 

concern  the  operation  of  the  hydro-electric  development  outside  of  the 
generating  station. 

A  706 . 3        Station  Labor. 

This  account  shall  include  the  wages  of  station  operators,  helpers 
and  oilers  engaged  in  operating  the  station  equipment,  beginning  at 
end  of  penstock  and  ending  where  the  electric  current  leaves  the  gen- 
erating station. 

The  wages  of  employees  engaged  in  operating  conversion  equipment 
used  primarily  for  transforming  electric  energy  in  voltage  or  frequency 
for  the  purpose  of  transmitting  or  distributing  it  more  efficiently 
shall  not  be  charged  to  this  account  but  to  the  appropriate  account 
under  transmission  or  distribution  expenses. 

A  706.4        Miscellaneous  Labor. 

This  account  shall  include  salaries  and  wages  of  all  miscellaneous 
employees  in  and  about  the  hydro-electric  generating  plant  engaged  in 
operating  the  plant.  This  covers  such  labor  as  that  of  watchmen, 
janitors,  elevator  men,  and  messengers;  employees  engaged  in  clean- 
ing buildings  and  yards;  and  general  labor  not  chargeable  to  any  of  the 
foregoing  hydro-electric  power  plant  labor  accounts,  excluding  main- 
tenance labor. 

D  707        Power  Plant  Supplies  and  Expenses. 

C  B  A  707 . 1        Water  for  Power. 

This  account  shall  include  the  cost  of  water  purchased  for  water 
power  generation. 

C  B     707 . 2        Miscellaneous  Supplies  and  Expenses. 
A  707.21  Lubricants. 

This  account  shall  include  the  cost  of  lubricants  for  hydro-electric 
prime  movers,  machinery  connected  therewith  and  auxiliary  pumping 
and  exciting  machinery.  This  does  not  include  transformer  oil,  wagon 
grease,  or  oil  for  lanterns. 

This  account  also  includes  the  cost  of  recovering  oil  from  waste  and 
the  cost  oJ  filtering  and  handling. 

A 707.22  Production  Supplies. 

This  account  shall  include  the  cost  of  ail  supplies,  tools,  etc.,  used 
in  the  water  power  generating  plant  which  are  consumed  in  the  operat- 
ing pro:ess,  the  replacement  of  which  does  not  constitute  a  repair  or 


renewa 


OPEKATIXG  EXPENSE  ACCOUNTS  93 

Principal  items :  Waste,  packing,  wipers,  gauge  glasses.  *  gaskets, 
bolts,  screws,  nails,  dynamo  and  motor  brushes,  cans  for  containing 
rags  and  waste,  transformer  oil  and  hand  oil  cans. 

A  707.23  Station  Expense. 

This  account  shall  include  the  general  and  miscellaneous  expendi- 
tures in  water  power  generating  plant  not  specifically  chargeable  to 
other  accounts. 

Principal  items:  Lighting,  heating,  and  cleaning  systems,  fire  pro- 
tection systems,  janitors'  supplies,  ice  water,  meals  and  carfares,  sta- 
tionery, telephone  and  toilet  service,  care  of  streets,  yards  and  sidings. 
Minor  rents  may  be  included.  (See  General  Expense  Account  No. 
781.31,  "Rentals.") 

This  does  not  include  miscellaneous  labor,  which  is  provided  for 
under  account  No.  706.4,  "  Miscellaneous  Labor." 

Maintenance 
D  708        Maintenance  of  Power  Plant. 

C  B  A  708 . 1        Maintenance  of  Station  Buildings. 

This  account  shall  include  the  cost  of  maintaining  hydro-electric 
power  plant  buildings  and  permanent  fixtures  therein,  including  fur- 
niture as  follows : 

a.  Sundries. — Repairs  to  furniture,  fixtures  and  other  such  prop- 
erty in  and  about  the  generating  plant  not  specifically  provided  for 
elsewhere.  Alterations,  if  not  provided  for  by  a  reserve,  should  be 
charged  under  this  classification. 

b.  Station  Structures. — Repairs  to  Ixiildings  and  permanent  fix- 
tures therein. 

Principal  items :  Plumbing,  windows,  sashes,  roof,  doors  and  walls ; 
heating  and  lighting  systems ;  grounds  and  streets,  vaults,  sheds,  pits, 
sidewalks,  elevators ;  lockers,  fire  protection  system  and  painting. 

CB     708.2        Maintenance    of    Reservoirs,    Dams    and 
Waterways. 

A 708.21      Maintenance    of    Reservoirs,    Dams    and 
Intakes. 

This  account  shall  include  the  cost  of  maintaining  reservoirs,  dams 
and  intakes  with  their  appurtenant  structures  and  facilities  such  as 
gates,  raising  and  lowering  apparatus,  wasteways,  spillways,  fish  lad- 
ders, etc. 


94  OPEKATING  EXPENSE  ACCOUNTS 

A  708 .  22      Maintenance  of  Navig^ation  Facilities. 

This  account  shall  include  the  cost  of  maintaining  locks,  booms, 
sluices,  regulating  gates  and  other  appurtenant  structures  and  facilities 
for  navigation  purposes. 


A  708 .  23      Maintenance  of  Waterways. 

This  account  shall  include  the  cost  of  maintaining  canals,  ditches, 
flumes,  tunnels,  pipe  lines,  and  other  appurtenant  structures  and 
facilities. 

A  708 .  24      Maintenance  of  Forebays,  Penstocks  and 
Tailraces. 

This  account  shall  include  the  cost  of  maintaining  forebays,  |)en- 
stocks,  tailraces,  and  other  appurtenant  structures  and  facilities. 

A  708 .  25      Maintenance  of  Way  and  Cars. 

This  account  shall  include  the  cost  of  maintaining  rolling  stock, 
roadbed  and  steel  in  connection  with  spur  tracks,  tramways,  inclines, 
freight  cars,  barges,  etc.,  which  are  a  part  of  the  hydro-electric  de- 
velopment. 

A  708 .  26      Maintenance  of  Telephone  System. 

This  account  shall  include  the  cost  of  maintaining  telephone  lines, 
telephone  apparatus  and  switchboards  of  the  telephone  systeiu  in  the 
water  |X)wer  generating  station  and  between  the  station  and  the  head- 
works. 

A 708.27      Maintenance    of    Production    Roads    and 
Trails. 

This  account  shall  include  the  cost  of  maintaining  roads,  trails, 
bridges,  tramways,  and  railways  used  primarily  in  connection  with 
h\-dro-electric  production  of  electricity;  also  the  cost  to  the  accounting 
company  of  maintaining  roads  dedicated  to  public  use. 

C  B     708 . 3    Maintenance  of  Hydro-electric  Equipment. 

A  708 .  31      Maintenance  of  Water  Turbines  and  Water 
Wheels. 

This  account  shall  include  the  cost  of  maintaining  water  wheels  and 
governors  and  their  accessories.     This  covers  all  equipment  from  pen- 


I 


OPERATING  EXPENSE  ACCOUNTS  95 

Stocks  to  tailraces,  such  as  gates,  valves,  pumps,  piping,  etc.,  used  in 
connection  with  water  wheels  and  governors. 

Principal  item :  Water  wheels  and  housing,  needle  valves,  nozzles, 
deflecting  hoods,  relief  valves,  air  compressors  for  surge  tanks,  pumps 
for  governors  and  necessary  piping  in  connection  therewith, 

A  708 .  32      Maintenance  of  Turbo-generator  Units. 

This  account  shall  include  the  cost  of  maintaining  hydraulic  turbine- 
driven  generator  units  and  all  appurtenant  apparatus.  This  covers  the 
cost  of  maintaining  air  and  circulating  pumps,  lubricating  systems, 
valves,  governors,  draft  tubes,  etc. 

Note. — This  account  may  be  sub-divided  to  show  separately  the  cost  of  main- 
taining the  prime  mover  and  the  cost  of  maintaining  the  electric  generator. 

A  708 .  33      Maintenance  of  Main  Generators. 

This  account  shall  include  the  cost  of  maintaining  dynamos,  alterna- 
tors and  other  electric  generating  apparatus  driven  by  hydraulic  power. 

A  708 .  34      Maintenance  of  Exciting  Apparatus. 

This  account  shall  include  the  cost  of  maintaining  exciters,  motors, 
motor  generators,  boosters,  regulators  and  exciting  batteries  used  in 
the  water  power  generating  plant. 

A 708.35      Maintenance    of    Control    and    Protective 
Equipment. 

This  account  shall  include  the  cost  of  maintaining  switches,  circuit 
breakers,  busses,  current  and  potential  transformers,  relays,  indicating 
and  recording  instruments  and  switchboard  panels,  lightning  arresters, 
reactances  and  ground  resistances  used  in  the  water  power  generating 
plant,  and  wires  and  cables  used  in  conjunction  with  the  foregoing. 

A  708.36      Maintenance  of  Transformers  and  Convert- 
ing Apparatus. 

This  account  shall  include  the  cost  of  maintaining  transformers  and 
converting  apparatus  in  the  water  power  generating  plant  other  than 
that  used  primarily  for  transmission  and  distribution  purposes. 

C  B  A  708 . 4    Maintenance  of  Miscellaneous  Power  Plant 
Equipment. 

This  account  shall  include  the  cost  of  maintaining  iniscellaneous 
equipment,  such  as  belts,  pulleys,  hangers,  countershafts,  machine  tools, 
cars,  locomotives,  locomotive  cranes  for  power  plant  purposes,  and  all 
other  equipment  properly  includible  in  fixed  capital  account  No.  323, 
"  Miscellaneous  Power  Plant  Equipment — Hydro." 


96  OPERATING  EXPENSE  ACCOUNTS 

This  account  shall  also  include  the  cost  of  maintaining  tools  and 
implements  assigned  to  the  hydro-electric  plant,  such  as  blacksmiths', 
machinists',  and  pipe-fitters'  tools,  cutting  tools,  etc. 

Gas  Generation 
Operation 
DOB     709        Superintendence  and  Labor.     * 

A  709 . 1        Superintendence. 

This  account  shall  include  the  salaries  of  superintendents  and  assist- 
ants, chemists,  day  and  night  foremen,  and  station  clerks ;  and  also  that 
portion  of  the  salaries  of  the  engineering  staff  chargeable  to  gas  power 
generating  plant  operations. 

A 709.2        Fuel  Labor. 

This  account  shall  include  the  cost  of  all  labor  engaged  in  the  han- 
dling of  fuel  from  storage  to  the  point  of  use  whether  such  fuel  is  to 
be  used  in  a  producer  gas  process  or  directly  in  internal  combustion 
engines.  It  shall  include  also  all  other  operating  labor  in  the  production 
of  producer  gas  and  the  handling  of  residuals  from  the  building  to  the 
point  where  such  residuals  are  placed  when  removed  from  the  building. 
It  does  not  include  maintenance  labor. 

A  709 . 3        Engine  Labor. 

This  account  shall  include  the  cost  of  all  labor  on  prime  movers. 
Principal   items :     Chief   engineer   and   assistants,    engineers,   oilers, 
wipers,  and  machinists. 

A  709 . 4        Electrical  Labor. 

This  account  shall  include  the  cost  of  all  labor  in  connection  with 
electrical  apparatus  and  devices  beginning  with  the  dynamos  direct 
connected  or  belted  to  the  prime  movers  and  including  the  switchboard, 
feeder  terminal  board  and  to  where  the  electric  current  leaves  the 
station  for  the  transmission  or  distribution  system. 

Principal  items :  System  operators  or  load  dispatchers,  foremen 
regulators,  regulators  and  assistants,  switchboard  men,  brushmen,  wipers 
and  wiremen. 

A  709 . 5        Miscellaneous  Labor. 

This  account  shall  include  salaries  and  wages  of  all  employees  in  and 
about  the  gas  power  generating  plant  engaged  in  operating  the  plant, 
wVose  time  is  not  chargeable  to  any  of  the  foregoing  gas  power  plant 


OPERATING  EXPENSE  ACCOUNTS  97 

labor  accounts.  This  covers  such  labor  as  that  of  watchmen,  janitors, 
elevator  men  and  messengers ;  employees  engaged  in  cleaning  buildings 
and  yards ;  and  all  other  general  labor,  excluding  maintenance  labor. 

D  710        Power  Plant  Supplies  and  Expenses. 

C  B  A  710 . 1        En^ne  Fuel. 

This  account  shall  include  the  cost  of  all  fuel  such  as  kerosene, 
gasoline,  and  oil  used  in  internal  combustion  engines.  Where  the 
producer  gas  process  is  used  it  should  include  the  cost  of  fuel  used 
for  producing  gas.  The  cost  should  be  f .  o.  b.  power  station  and  should 
cover  the  invoice  cost  of  fuel,  freight,  switching,  demurrage,  cost  of 
transfer  from  cars  or  boats  to  wagons,  cartage  to  point  of  delivery 
at  plant  for  storage  and  cost  of  transfer  to  storage.  In  case  fuel  is 
transferred  from  one  place  of  storage  to  another,  such  cost  should  also 
be  included.  Any  discrepancy  between  the  actual  amount  of  fuel  on 
hand  and  that  recorded  in  the  books  of  the  accounting  company  should 
likewise  be  taken  care  of  in  this  account. 

C  B     710 . 2        Miscellaneous  Supplies  and  Expenses. 
A  710.21         Water. 

This  account  should  include  the  cost  of  water  used  in  the  production 
of  gas  for  power  purposes  and  water  used  for  cooling  gas  prime  movers 
or  other  internal  combustion  engines. 

If  water  is  purchased,  charge  at  the  contract  price  or  the  meter  rate. 

If  water  is  pumped  by  the  company,  charge  here  the  cost  of  pumping. 

This  account  should  include  all  labor  cost  and  expenses  in  connection 
with  the  handling  of  water,  such  as  operating  the  pumping  station,  and 
chemicals  used  in  purification  and  filtration. 

A  710.22  Lubricants. 

This  account  shall  include  the  cost  of  lubricants  for  machinery  in 
the  gas  power  generating  plant.  This  does  not  include  oil  for  trans- 
formers, grease  for  wagons,  or  oil  for  lanterns,  etc. 

Oil  used  in  pumping  station  should  be  charged  against  account  No. 
710.21,  "  Water." 

A  710 .  23         Production  Supplies. 

This  account  shall  include  the  cost  of  all  supplies,  tools,  etc.,  used  in 
the  gas  power  generating  plant  which  are  consumed  in  the  operating 
process,  the  replacement  of  which  does  not  constitute  a  repair  Qt 
renewal. 


98  OPERATING  EXPENSE  ACCOUNTS 

Principal  items :  Waste,  packing,  wipers,  gauge  glasses,  gauge 
washers,  manhole  gaskets,  handhole  gaskets,  fuel  room  tools,  steam  and 
air  hose,  boilers,  screws,  nails,  tools,  dynamo  brushes. 

A 710.24  Station  Expense. 

This  account  shall  include  the  general  and  miscellaneous  expenditures 
in  the  gas  power  generating  plant  not  specifically  chargeable  to  other 
accounts. 

Principal  items :  Lighting,  heating  and  cleaning  system,  fire  pro- 
tection system,  janitors'  supplies,  ice  water,  meals  and  carfares,  station- 
ery, telephone  and  toilet  service,  care  of  streets,  yards,  sidings.  Minor 
rents  may  be  included.  (See  General  Expense  Account  No.  781.31, 
"  Rentals.") 

This  does  not  include  miscellaneous  labor,  which  is  carried  under 
account  No.  709.5,  "  Miscellaneous  labor." 

Maintenance 
D  711        Maintenance  of  Power  Plant. 

C  B  A  711 . 1        Maintenance  of  Station  Building's. 

This  account  shall  include  the  cost  of  maintaining  gas  power  plant 
buildings  and  permanent  fixtures  therein,  including  furniture,  as 
follows : 

a.  Sundries. — Repairs  to  furniture,  fixtures,  and  other  such  prop- 
erty in  and  about  the  gas  power  generating  plant  not  sj^ecifically  pro- 
vided for  elsewhere.  Alterations,  if  not  provided  for  by  a  reserve, 
should  be  charged  under  this  classification. 

b.  Station  Structures. — Repairs  to  buildings  and  permanent  fix- 
tures therein. 

Principal  items :  Plumbing,  windows,  sashes,  roof,  doors  and  walls ; 
heating  and  lighting  systems ;  grounds  and  streets,  walks,  sheds,  pits, 
sidewalks,  elevators,  lockers,  fire  ])rotection  system,  painting. 

C  B     711 . 2        Maintenance  of  Gas  Equipment. 

A  711 .  21  Maintenance  of  Fuel  Holders,  Producers 

and  Accessories. 

This  account  shall  include  the  cost  of  maintaining  all  tanks,  facilities 
and  apparatus  used  for  the  storage  of  fuel  or  the  production  of  gas 
to  be  used  for  power  purposes  in  the  generation  of  electric  energy. 
This  covers  the  cost  of  repairing  gas  conductor,  exhaust  pipe,  and 
other  auxiliary  gas  producing  apparatus,  and  also  producers,  econo- 
mizers, regenerators,  vaporizers,  steam  injectors,  scrubbers,  exhauster 


OPERATING  EXPENSE  ACCOUNTS  99 

outfit,  and  other  similar  ai)paratus,  as  well  as  specially  provided  boilers, 
pumps,  flues,  and  pipes,  coal  and  ash  conveyors  and  accessory  equip- 
ment, blower  engines,  holders,  and  all  similar  auxiliary  equipment. 

A  711 .  22         Maintenance  of  Engines  and  Turbines. 

This  account  shall  include  the  cost  of  maintaining  gas  engines  and 
turbines  devoted  to  the  production  of  electric  energy,  including  valves, 
governors,  and  ignition  and  starting  apparatus.  The  maintenance  of 
power  apparatus,  such  as  shafts,  belts,  etc.,  should  not  be  charged  to 
this  account. 

CB     711.3        Maintenance  of  Electric  Equipment. 
A  711 .  31         Maintenance  of  Main  Generators. 

This  account  shall  include  the  cost  of  maintaining  dynamos,  alter- 
nators, and  other  electric  generating  apparatus  driven  by  gas  power, 

A  711.32         Maintenance  of  Exciting  Apparatus. 

This  account  shall  include  the  cost  of  maintaining  exciters,  motors, 
motor  generators,  boosters,  regulators  and  exciting  batteries  used  in 
the  gas  power  generating  plant. 

A  711.33  Maintenance  of  Control  and  Protective 

Apparatus. 

This  account  shall  include  the  cost  of  maintaining  switches,  circuit 
breakers,  busses,  current  and  potential  transformers,  relays,  indicating 
and  recording  instruments  and  switchboard  panels,  lightning  arresters, 
reactances  and  ground  resistances  used  in  the  gas  generation  plant,  and 
wires  and  cables  used  in  conjunction  with  the  foregoing. 

A  711.34         Maintenance  of  Transformers  and  Con- 
verting Apparatus. 

This  account  shall  include  the  cost  of  maintaining  transformers  and 
converting  apparatus  in  the  gas  power  generating  plant  other  than  that 
used  primarily  for  transmission  and  distribution  purposes. 

C  B  A  711.4        Maintenance  of  Miscellaneous  Power  Plant 
Equipment. 

This  account  shall  include  the  cost  of  maintaining  miscellaneous 
equipment,  such  as  belts,  pulleys,  hangers,  countershafts,  machine 
tools,  cars,  locomotives,  locomotive  cranes  for  power  plant  purposes, 
and  all  other  equipment  properly  includible  in  fixed  capital  account 
No.  327  "  Miscellaneous  Power  Plant  Equipment — Gas." 


100  OPERATING  EXPENSE  ACCOUNTS 

This  account  shall  include  the  cost  of  maintaining  tools  and  imple- 
ments assigned  to  the  gas  power  plant,  such  as  blacksmiths',  machinists', 
and  pipe  fitters'  tools,  engine  tools  and  cutting  tools. 

D  C  £  A  712        Power  Gas  from  Other  Sources. 

This  account  shall  include  the  cost  of  all  purchased  or  jointly  pro- 
duced power  gas  consumed  in  the  gas  power  generating  plant. 

Miscellaneous  Production  Accounts 
D  C  B  A  713        Electric  Energy  from  Other  Sources. 

This  account  shall  include  the  cost  at  the  point  of  delivery  to  the 
accounting  company  of  all  electric  energy  purchased  for  re-sale  or 
jointly  produced. 

Note  A. — If  the  accounting  company  actually  exchanges  power  with  another 
company,  i.  e.,  if  the  agreement  between  them  provides  that  the  receiving  com- 
pany shall  pay  the  producing  company  a  price  barely  sufficient  to  cover  the 
average  production  expense  per  unit  of  energy  delivered,  then  the  accounting 
company  shall  charge  to  this  account  the  amount  that  it  pays  the  other  company 
which  is  a  party  to  such  agreement  and  credit  this  account  with  the  amount  which 
it  receives.  If  the  agreement  provides  for  the  payment  by  the  receiving  company 
of  more  than  the  bare  production  expense  per  unit,  the  amount  received  shall  be 
credited  by  the  producing  company,  not  to  this  account,  but  to  the  appropriate 
operating  revenue  account. 

Note  B. — Current  purchased  at  established  tariff  rates  from -other  companies 
for  lighting  offices,  stations,  etc.,  or  other  similar  purposes  connected  with  the 
operations  of  the  accounting  company  shall  not  be  charged  to  this  account  but 
to  the  appropriate  departmental  expense  account. 

D  C  B  A  714        Duplicate  Production  Charges — Or. 

This  account  shall  be  credited  with  all  charges  made  to  produc- 
tion accounts  for  electric  energy  consumed  at  works  and  generating 
stations  and  not  otherwise  provided  for. 

D  C  B  A  715        Production  Expenses  Transferred — Or. 

This  account  shall  include  such  part  of  the  accounting  company's 
expense  of  producing  electric  energy  as  is  properly  chargeable  to 
another  coordinate  department,  as,  for  example,  an  electric  railroad 
or  a  gas  department. 

720    TRANSMISSION  EXPENSES 

Note. — Transmission  and  distribution  expense  accounts  may  be  combined 
where  the  same  poles  and  subway  systems  carry  transmission  and  distribution 
lines,  and  it  is  impracticable  to  assign  accurately  the  cost  of  operation  and  main- 
tenance as  between  the  two  functions. 

D  721        Transmission  Operation  and  Maintenance. 

C  B  A  721 . 1        Superintendence. 

This  account  shall  include  the  pay  and  traveling  and  incidental  ex- 
penses   of    the    superintendent,  his  assistants  and  clerks  employed  in 


OPERATING   EXPENSE   ACCOUNTS  101 

supervising  the  operation  and  maintenance  of  the  transmission  system; 

also  the  cost  of  making  maps  and  records,  the  cost  of  stationery  and 

printing  and  other  miscellaneous  office  supplies  and  expenses  of   the 

transmission  superintendent's  office. 

Note. — The  accounting  company  may  set  up  sub-accounts  under  this  general 
heading,  if  it  so  desires. 

C  B  A  721 . 2        Substation  Labor. 

This  account  shall  include  the  pay  of  substation  operators  in  sub- 
stations devoted  to  transmission  purposes,  also  the  cost  properly  charge- 
able to  operating  expenses  of  the  labor  expended  in  changing  trans- 
mission transformers. 

C  B  A  721 . 3        Substation  Supplies  and  Expenses. 

This  account  shall  include  the  cost  of  supplies  for  and  expenses 
incurred  in  connection  with  the  operation  of  transmission  substations, 
such  as  carfares,  meals,  telephone  rentals  and  tolls,  stationery  and 
printing,  oil  and  waste,  water,  heat,  janitors'  supplies,  etc.,  which  are 
not  specifically  provided  for  elsewhere,  also  the  cost  properly  charge- 
able to  operating  expenses  (exclusive  of  labor)  incident  to  changing 
transmission  transformers. 

CB     721.4        Operation  of  Transmission  Lines. 

A  721 .  41  Labor  and  Expense,  Underground  Con- 

duits. 

This  account  shall  include  wages  and  expenses  in  connection  with 
the  inspection  and  cleaning  of  subway  ducts,  manholes  and  sewer 
connections  for  transmission  lines. 

A  721.42  Labor  and  Expense,  Poles,  Towers  and 

Fixtures. 

This  account  shall  include  the  pay  and  expenses  of  patrolmen,  testers, 
etc.,  employed  on  overhead  transmission  lines,  also  the  cost  of  trimming 
trees  along  and  of  clearing  brush  and  other  refuse  from  the  trans- 
mission right  of  way  after  the  transmission  line  has  been  placed  in 
operation. 

A  721.43  Labor  and  Expense,  Overhead  Conduc- 

tors. 

This  account  shall  include  the  wages  and  expenses  of  patrolmen, 
testers,  etc.,  employed  on  overhead  transmission  lines. 

A  721.44         Labor  and  Expense,  Underground  Con- 
ductors. 

This  account  shall  include  the  wages  and  expenses  of  patrolmen, 
testers,  etc.,  employed  on  underground  transmission  lines. 


102  OPERATING  EXPENSE  ACCOUNTS 

A  721.45         Miscellaneous  Supplies  and  Expenses. 

This  account  shall  include  miscellaneous  items  of  transmission  ex- 
penses not  provided  for  in  the  foregoing  transmission  operating 
accounts.  Minor  rents  may  be  included.  (See  General  Expense  Ac- 
count No.  781.31,  "Rentals.") 

C  B  A  721 . 5        Maintenance  of  Structures. 

This  account  shall  include  the  cost  of  maintaining  transmission  sub- 
station buildings  and  other  structures.  The  principal  items  to  be  in- 
cluded in  this  account  are  repairs  to  buildings  and  all  permanent  fix- 
tures therein  and  appurtenant  thereto  and  the  cost  of  maintaining 
grounds,  streets,  drives,  sidewalks,  vaults,  pits,  sheds  and  permanent 
foundations  of  apparatus,  which  are  included  as  a  part  of  the  cost  of 
the  structures  in  which  located. 

C  B  A  721.6        Maintenance  of  Substation  Equipment. 

This  account  shall  include  the  cost  of  maintaining  transformers, 
transmission  switches,  switchboards  and  connected  equipment,  cooling 
systems,  etc.  Include  also  in  this  account  the  cost  of  maintaining  out- 
door transmission  substation  equipment  and  appurtenances. 

CBA721,7        Maintenance  of  Underground  Conduits. 

This  account  shall  include  the  cost  of  maintaining  subways  and 
underground  conduits  carrying  transmission  conductors.  This  includes 
the  cost  of  repairs  of  ducts,  manholes,  sewer  connections  and  traps  and 
of  paving  over  such  subways,  but  not  the  cost  of  repairing  conductors 
or  the  insulation  thereof. 

CB     721.8        Maintenance  of  Transmission  Lines. 

A  721.81  Maintenance  of  Poles,  Towers  and  Fix- 

tures. 

This  account  shall  include  the  cost  of  maintaining  jxtles  and  cross- 
arms,  braces,  guys  and  other  pole  supports,  fixtures  and  towers  used 
in  the  transmission  system.  This  account  also  covers  such  matters  as 
painting  poles,  repairing  streets  and  repairing  sidewalks  after  pole 
renewals,  etc. 

A  721.82         Maintenance  of  Overhead  Conductors. 

This  account  shall  include  the  cost  of  maintaining  all  conductors, 
feeders,  cable,  wire,  insulators,  and  insulating  material  used  in  over- 
head transmission  systems. 


OPERATING  EXPENSE  ACCOUNTS  •     103 

A  721 .  83  Maintenance  of  Underground  Conductors. 

This  account  shall  include  the  cost  of  maintaining  all  conductors, 
cables,  insulators,  and  insulating  material  used  in  the  underground 
transmission  system. 

C  B  A  721.9        Maintenance  of  Roads  and  Trails. 

This  account  shall  include  the  cost  of  maintaining  permanent  roads, 
trails  and  bridges  used  in  connection  with  the  transmission  system. 

730  DISTRIBUTION  EXPENSES 

Note. — Transmission  and  distribution  expense  accounts  may  be  combined  where 
the  same  poles  and  subway  systems  carry  transmission  and  distribution  lines, 
and  it  is  impracticable  to  assign  accurately  the  cost  of  operation  and  maintenance 
as  between  the  two  functions. 

D  731        Distribution  Operation  and  Maintenance. 

C  B  A  731 . 1        Superintendence. 

This  account  shall  include  the  pay,  traveling  and  incidental  expenses 
of  the  superintendent,  his  assistants  and  clerks  employed  in  suj^ervising 
the  operation  and  maintenance  of  the  distribution  system,  also  the  cost 
of  making  maps  and  records,  the  cost  of  stationery  and  printing  and 
other  miscellaneous  office  supplies,  telephone  rental  and  tolls,  janitor 
service,  v^^ater,  heat  and  other  expenses  of  the  distribution  superin- 
tendent's office. 

Note. — The  accounting  company  may  set  up  sub-accounts  under  this  general 
heading,  if  it  so  desires. 

C  B     731 . 2        Substation  Expenses. 
A  731. 21  Substation  Labor. 

This  account  shall  include  the  pay  of  substation  operators  and  of 
clerks,  janitors  and  w^atchmen  and  of  other  employees  in  substations 
devoted  to  distribution  purposes. 

A  731.22  Substation  Supplies  and  Expenses. 

This  account  shall  include  the  cost  of  supplies  for  and  expenses 
incurred  in  connection  with  the  operation  of  distribution  substations, 
such  as  carfares,  meals,  telephone  rentals  and  tolls,  stationery  and 
printing,  oil  and  waste  water,  heat,  janitors'  supplies,  etc.,  which  are 
not  specifically  provided  for  elsewhere. 

CB     731.3        Storage  Battery  Expenses. 
A  731.31  Storage  Battery  Labor. 

This  account  shall  include  the  wages  of  battery  men,  including 
inspectors  and  testers. 


104  OPERATING  EXPENSE  ACCOUNTS 

A  731 .  32  Storage  Battery  Supplies  and  Expenses. 

This  account  shall  include  the  cost  of  acid  and  distilled  water  in 
cells,  soda,  sponges,  brooms,  mops,  waste,  rags,  hydrometers,  ther- 
mometers, automatic  cell  fillers,  rubber  hose,  gloves,  shoes,  paint,  etc., 
and  brushes  for  boosters  and  compensators. 

C  B     731 . 4        Operation  of  Distribution  Lines. 

A  731.41         Labor  and  Expenses,  Underground  Con- 
duits. 

This  account  shall  include  wages  and  expenses  in  connection  with 
the  inspection  and  cleaning  of  subway  ducts,  manholes  and  sewer  con- 
nections for  distribution  lines. 

A  731 .  42  Labor  and  Expenses,  Poles,  Towers  and 

Fixtures. 

This  account  shall  include  the  pay  and  expenses  of  patrolmen,  testers, 
etc.,  employed  on  overhead  distribution  lines,  and  the  cost  of  trimming 
trees  along  and  of  clearing  brush  and  other  refuse  from  the  distribution 
right  of  way  after  distribution  line  has  been  placed  in  operation. 

A  731.43  Labor    and    Expenses,    Overhead    Con- 

ductors. 

This  account  shall  include  the  wages  and  expenses  of  patrolmen, 
testers,  etc.,  employed  on  overhead  distribution  lines. 

A  731.44  Labor  and  Expenses,  Underground  Con- 

ductors. 

This  account  shall  include  the  wages  and  expenses  of  patrolmen, 
testers,  etc.,  employed  on  underground  distribution  lines. 

A  731 .  45  Miscellaneous  Supplies  and  Expenses. 

This  account  shall  include  all  expenses  incurred  in  connection  with 
the  op>eration  of  the  distribution  system  not  specifically  chargeable  to 
other  accounts.  Minor  rents  may  be  included.  (See  General  Expense 
Account  No.  781.31,  "Rentals.") 

C  B     731 . 5        Meter  and  Transformer  Operation. 

A  731.51  Salaries   and   Expenses,   Meter  Depart- 

ment. 

This  account  shall  include  the  salaries  and  ex|>enses  of  superinten- 
dents and  clerks  in  meter  department,  and  also  that  i>ortion  of  the 
salaries  of  the  engineering  staff  chargeable  to  that  department. 

A  731 .  52  Testing  Meters. 

This  account  shall  include  the  cost  of  testing  and  insi)ecting  meters 
on  consumers'  premises  or  in  meter  shops. 


OPERATING  EXPENSE  ACCOUNTS  105 

A  731.53  Miscellaneous  Expenses,  Meter  Depart- 

ment. 

This  account  shall  include  such  expenses  as  stationery,  postage, 
telephone  service,  light,  fuel,  testers'  tools  and  supplies.  Minor  rents 
may  be  included.  (See  General  Expense  Account  No.  781.31,  "Rentals.") 

A  731 .  54  Removing"  and  Resetting-  Meters. 

This  account  shall  include  the  cost  of  resetting,  changing  and  remov- 
ing meters  on  consumers'  premises,  also  the  cost  of  connecting  and  dis- 
connecting services. 

A  731 .  55  Removing-  and  Resetting  Transformers. 

This  account  shall  include  the  cost  of  resetting,  changing,  inspecting, 
testing  and  removing  transformers  on  consumers'  premises  or  on  poles 
or  in  manholes  adjacent  thereto,  when  such  transformers  are  mstalled 
for  the  purpose  of  stepping  down  current  from  transmission  or  distribu- 
tion voltages  to  the  voltage  at  which  it  is  used  by  the  consumer. 

C  B  A  732 . 1    Maintenance  of  Structures. 

This  account  shall  include  the  cost  of  maintaining  distribution  sub- 
station buildings  and  other  structures.  The  principal  items  to  be  in- 
cluded in  this  account  are  repairs  to  buildings  and  all  permanent 
fixtures  therein  and  appurtenant  thereto,  and  the  cost  of  maintaining 
grounds,  streets,  drives,  sidewalks,  vaults,  pits,  sheds  and  permanent 
foundations  and  apparatus  which  are  included  as  a  part  of  the  cost  of 
the  structure  in  which  located. 

C  B  A  732 . 2    Maintenance  of  Substation  Equipment. 

This  account  shall  include  the  cost  of  maintaining  distribution  sub- 
station transformers,  bus-bar  structures,  switchboards,  switches  and 
connected  equipment  and  other  distribution  equipment,  whether  located 
in  distribution  substation  buildings,  in  generating  stations,  on  con- 
sumers' premises  or  outdoors. 

C  B  A  732 . 3    Maintenance  of  Storage  Battery  Equipment. 

This  account  shall  include  the  cost  of  maintaining  storage  battery 
equijMnent,  such  as  storage  battery  tanks,  switches,  regulating  ap- 
paratus, boosters,  and  compensators,  renewal  of  worn  out  cells,  includ- 
ing diaphragms,  negative  and  positive  plates,  lead  in  strip,  spelter,  dry 
boards,  tin  bands,  lamp  black,  and  items  of  a  similar  nature. 


106  OPERATING  EXPENSE  ACCOUNTS 

C  B  A  732 . 4    Maintenance  of  Underground  Conduits. 

This  account  shall  include  the  cost  of  maintaining  subways  and 
underground  conduits  carrying  distribution  conductors.  This  covers 
repairs  of  conduits,  manholes,  sewer  connections  and  traps,  and  paving 
over  such  subways  and  all  ducts  and  conduits  but  not  any  repairs  of 
conductors  or  the  insulation  thereof. 

C  B     732 . 5    Maintenance  of  Distribution  Lines. 

A  732 .  51      Maintenance  of  Poles,  Towers  and  Fixtures. 

This  account  shall  include  the  cost  of  maintaining  poles  and  cross- 
arms,  braces,  guys  and  other  pole  supix)rts,  fixtures  and  towers  used 
in  the  distribution  system.  This  account  also  covers  such  matters  as 
painting  poles,  repairing  streets  and  repairing  sidewalks  after  pole 
renewals,  etc. 

A  732 .  52      Maintenance  of  Overhead  Conductors. 

This  account  shall  include  the  cost  of  maintaining  all  conductors, 
feeders,  cable,  wire,  insulators  and  insulating  materials  used  in  the 
overhead  distribution  system. 

A 732.53      Maintenance  of  Underground  Conductors. 

This  account  shall  include  the  cost  of  maintaining  all  conductors, 
feeders,  cable,  wire,  insulators  and  insulating  materials  used  in  the 
underground  distribution  system. 

C  B  A  732 . 6    Maintenance  of  Services. 

This  account  shall  include  the  cost  of  maintaining  services,  both 
underground  and  overhead,  leading  from  the  mains  to  the  consumers' 
premises. 

C  B     732 . 7    Maintenance  of  Transformers  and  Meters. 
A 732.71      Maintenance  of  Line  Transformers. 

This  account  shall  include  the  cost  of  maintaining  line  transformers, 
i.  e.  transformers  installed  for  stepping  down  current  from  transmis- 
sion or  distribution  voltages  to  the  voltage  at  which  it  is  used  by  the 
consumers.  This  covers  renewing  oil,  repainting,  rewinding,  removing 
and  replacing  and  repairs  to  such  switches  and  cutouts  on  consumers' 
]>remises  as  are  the  property  of  the  accounting  company. 

A  732 .  72      Maintenance  of  Consumers-'  Meters. 

This  account  shall  include  the  cost  of  maintaining  consumers'  meters, 
such  as  replacing  parts,  putting  in  new  jewels,  cleaning  and  painting. 


OPERATING  EXPENSE  ACCOUNTS  107 

750    UTILIZATION 
D  751        Utilization  Operation  and  Maintenance. 

OB     751.1        Commercial  Lamps — Operation. 
A  751 .  11  Commercial  Arc  Lamps. 

This  account  shall  include  the  cost  of  trimming  and  inspecting  arc 

lamps  on  consumers'  premises. 

Principal  items :  Trimming,  inspecting,  installing  and  removing 
lamps. 

A  751 .  12  Incandescent  Lamps — Installation. 

This  account  shall  include  the  cost  of  the  first  installation  of  lamps 
on  consumers'  premises  unless  such  cost  is  charged  to  the  consumer  or 
it  is  the  policy  of  the  company  to  capitalize  such  cost  through  charges 
to  fixed  capital  account  No.  341,  "Commercial  Lamps." 

A  751,13  Incandescent  Lamps — Renewals. 

This  account  shall  include  the  cost  of  renewing  incandescent  lamps 
on  consumers'  premises.  This  covers  cartage  and  delivery  expense, 
and  cost  of  photometering  lamps.  This  account  should  be  credited 
with  any  rebate  received  for  the  return  of  stubs  or  allowances  relating 
thereto. 

CB     751.2        Consumers'    Installation    and    Inspection 
Work. 

A  751 .  21  Inspection — Consumers'  Premises. 

This  account  shall  include  the  cost  of  inspection  of  consumers' 
premises.  This  covers  such  matters  as  the  charge  for  municipal  cer- 
tificates, charge  for  Board  of  Fire  Underwriters'  inspection  certificates, 
and  that  portion  of  the  salaries  and  expenses  of  the  engineering  staflf, 
or  of  any  other  department  than  distribution  department,  engaged  in 
technical  work  properly  assignable  to  this  account. 

A  751 .  22  Consumers '  Installations. 

This  account  shall  include  the  cost  of  all  labor  and  material  fur- 
nished without  charge  to  consumers  for  inside  work. 

Principal  items :  Attention  to  complaints  or  to  improving  the  char- 
acter of  service,  replacing  or  repairing  wiring  of  fixtures  or  electrical 
appliances,  moving  appliances  from  place  to  place  in  house,  reconnect- 
ing appliances. 


108  OPERATING   EXPENSE  ACCOUNTS 

C  B     751 . 3        Municipal  Street  Lamps — Operation. 
A  751.31  Municipal  Street  Arc  Lamps. 

This  account  shall  include  the  cost  of  trimming,  inspecting  and 
operating  municipal  street  arc  lamps. 

A  751.32         Municipal  Street  Incandescent  Installa- 
tion. 

This  account  shall  include  the  cost  of  the  first  installation  of  muni- 
cipal street  incandescent  lamps,  unless  such  cost  is  charged  to  the 
municipality  or  it  is  the  policy  of  the  accounting  company  to  capitalize 
such  cost  through  charges  to  fixed  capital  account  No.  342,  "Street 
Lighting  Equipment." 

A  751 .  33  Municipal  Street  Incandescent  Renewals. 

This  account  shall  include  the  cost  of  renewing  incandescent  lamps. 
This  covers  cartage  and  delivery  expense,  and  cost  of  photometering 
incandescent  lamps.  This  account  shall  be  credited  w^ith  any  rebate 
received  for  the  return  of  stubs  or  allowances  relating  thereto. 

CBA751.4        Maintenance  of  Commercial  Lamps. 

This  account  shall  include  the  cost  of  maintaining  commercial  lamps 
on  consumers'  premises.  This  covers  such  matters  as  setting  and 
removing  lamps  for  repairs  and  adjustment,  repair  parts,  testing  dur- 
ing the  adjustment  and  after  repairs;  also  that  portion  of  the  arc  lamp 
shop  expense  chargeable  thereto. 

CB     751.5        Maintenance  of  Municipal  Street- Lighting 
Equipment. 
A  751.51  Maintenance    of   Municipal   Street   Arc 

Lamps. 

This  account  shall  include  the  cost  of  changing  municipal  street  arc 
lamps  for  repairs  and  adjustments,  renewals,  repairs  of  mast  arms, 
hangers,  poles,  ropes,  etc.,  and  painting  poles;  also  that  proportion  of 
arc  lamp  shop  expense  chargeable  thereto. 

A  751 .  52  Maintenance  of  Municipal  Street  Incan- 

descent Lamps. 

This  account  shall  include  the  cost  of  maintaining  municipal  incan- 
descent street  lamps  and  fixtures,  including  specially  provided  poles 
if  such  poles  are  proi)erly  chargeal)le  to  fixed  capital  account  No.  342, 
"Street  Lighting  Equipment,"  which  see.  It  does  not  include  the  cost 
of  maintaining  subways  or  conductors. 


OPERATING  EXPENSE  ACCOUNTS  109 

760    COMMERCIAL  EXPENSES 
D  0         761        Commercial  Administration. 
B  A  761 . 1        Commercial  General  Labor. 

This  account  shall  include  the  cost  of  labor  of  superintendents  and 
assistants,  chief  clerks,  cashiers  and  assistants,  stenographers,  general 
clerks,  high  bill  clerks,  switchboard  operators,  messengers,  janitors, 
and  watchmen  employed  in  the  commercial  department. 

B     761.2        Commercial  Books  and  Contracts. 

A  761 .  21  Commercial  Bookkeeping. 

This  account  shall  include  the  cost  of  labor  of  bookkeepers  and 
clerks  employed  on  consumers'  accounts. 

A  761 .  22  Commercial  Contracts. 

This  account  shall  include  the  cost  of  labor  of  clerks  and  other 
employees  in  the  application  or  contract  bureau. 

B     761 . 3        Commercial  Meter  Reading  and  Collecting. 

A  761 .  31  Commercial  Collecting. 

This  account  shall  include  the  cost  of  labor  of  regular  and  prepay- 
ment collectors.  This  covers  cost  of  delivering  bills  and  proportion 
of  time  of  meter  readers  collecting  from  prepayment  meters. 

A  761 .  32  Meter  Reading. 

This  account  shall  include  the  cost  of  labor  of  meter  readers. 

B  A  761 . 4        Commercial  Supplies  and  Expenses. 

This  account  shall  include  the  cost  of  supplies  and  the  incidental 
expenses  of  the  commercial  office.  This  covers  meter  readers'  lamps 
and  carfare  of  employees  in  the  commercial  department.  Minor  rents 
may  be  included.  (See  General  Expense  Account  No.  781.31, 
"Rentals.") 

DCBA762        Agents'  Commissions. 

This  account  shall  include  the  amount  paid  by  the  accounting  com- 
pany to  agents  as  commissions  for  distributing  its  electric  energy  over 
the  agents'  distribution  lines  and  selling  the  same,  and  for  all  services 
performed  in  connection  therewith.  (See  Operating  Revenue  Account 
No.  611,  "Commissions  on  Others'  Electric  Energy,"  also  "Operating 
Revenue  Accounts — General  Instructions  and  Definitions,"  Section  2, 
Note  B,  page  71.) 


110  OPERATING  EXPENSE  ACCOUNTS 

770    NEW  BUSINESS  EXPENSES 

■NJoTE. — General  Account  770,  "  New  Business  Expenses,"  is  not  intended  to 
include  any  expense  connected  with  merchandising  and  jobbing  carried  on  as  a 
separate  department  of  the  accounting  company's  business  and  not  primarily  for 
the  purpose  of  obtaining  new  business  for  the  electric  department.  If  the  ac- 
counting company  sells  merchandise  or  does  jobbing  work  at  or  below  cost  for 
the  purpose  of  inducing  greater  use  of  electric  energy,  a  debit  balance  in  the 
jobbing  account  due  to  such  practice  may  be  charged  to  "  New  Business 
Expenses,"  or  sub-account  771.25,  "  Miscellaneous  New  Business  Supplies  and 
Expenses." 

D  C         771        New  Business  Expenses. 
B     771.1        New  Business  Salaries. 
A  771 .  11  New  Business  Management  Salaries. 

This  account  shall  include  the  cost  of  administration  of  the  depart- 
ment maintained  for  the  promotion  or  development  of  consumption  of 
electric  energy  including  that  portion  of  the  salaries  of  management 
and  clerks  in  agencies  and  contract  departments  assignable  to  new 
business. 


A  771 .  12  New  Business  Advertisings  Salaries. 

ace 
and  clerks. 


This  account  shall  include  the  salaries  of   the  advertising  manager 


B     771.2        New  Business  Supplies  and  Expenses. 
A  771 .  21  Demonstrations. 

This  account  shall  include  the  cost  of  labor  and  the  expense  incurred 
in  demonstrating  the  use  of  electric  appliances  for  the  purixjse  of 
obtaining  new  business. 

A  771 .  22         Wiring  and  Appliances. 

Tliis  account  shall  include  the  cost  of  wiring  consumers'  premises, 
and  of  electric  appliances,  including  delivery  and  connection  charges 
and  expense  in  connection  therewith,  supplied  to  consumers  without 
charge  in  order  to  induce  new  business. 

A  771 .  23  Advertising  Supplies  and  Expenses. 

This  account  shall  include  the  cost  of  supplies,  stationery,  and  the 
incidental  expenses  of  the  advertising  department.  This  covers  such 
items  as  booklets,  dodgers,  newspaper  advertising,  posters,  bulletins, 
and  all  related  expenses. 

A  771.24  Canvassing  and  Soliciting. 

This  account  shall  inckide  all  expenses  incurred  in  soliciting  new 
business,  such  as  wages,  commissions,  and  personal  expenses  of  can- 


OPERATING  EXPENSE  ACCOUNTS  111 

vassers,    cost    of    preparing    estimates,    engineering   advice   on    electric 
installation,  etc.,  and  office   sundries  in  connection  therewith. 

A  771 .  25  Miscellaneous    New    Business    Supplies 

and  Expenses. 

This  account  shall  include  office  and  personal  and  incidental  expenses 
of  the  promotion  or  new  business  department,  such  as  stationery,  and 
other  office  supplies,  etc.  Minor  rents  may  be  included.  (See  General 
Expense  Account  No.  781.31,  "Rentals.") 

780    GENERAL  AND  MISCELLANEOUS  EXPENSES 
D  781        Undistributed  General  Expenses. 

CB     781.1        General  Office  Salaries. 
A  781 .  11         Administrative  Salaries. 

This  account  shall  include  the  salaries  of  the  chairman  of  the  board, 
president,  vice-president,  treasurer,  secretary,  comptroller,  general 
auditor,  general  manager,  assistant  general  manager,  chief  engineer, 
general  suj^erintendent,  purchasing  agent,  and  all  other  employees 
whose*  jurisdiction  extends  to  the  entire  system  and  whose  services  can 
not  be  allocated  to  the  several  departments. 

A  781 .  12  Other  General  Office  Salaries. 

This    account    shall    include   the    salaries    of    auditors,    bookkeepers, 

cashiers,    paymasters,     stenographers,    clerks    employed     in     counting 

cash,   janitors,   porters,   messengers,    and   other   clerks   and    employees 

whose  time  is  devoted  to  the  work  of  the  general  office. 

Note. — The  cost  of  labor  of  clerks  and  other  employees  in  the  commercial 
department  shall  not  be  inclnded  in  this  account,  but  in  account  No.  761,  "Com- 
mercial Administration,"  or  the  appropriate  sub-division  thereof. 

C         781 . 2        Miscellaneous  General  Expenses. 
B  A  781.21  General  Office  Supplies  and  Expenses. 

This  account  shall  include  the  cost  of  office  supplies,  stationery, 
telegrams,  telephone  service,  and  the  maintenance  of  office  furniture, 
rental  of  office  equipment,  such  as  statistical  machines,  and  all  other 
miscellaneous  expenses  of  general  offices.  Minor  rents  may  be  in- 
cluded.    (See  General  Expense  Account  No.  781.31,  "Rentals.") 

Expenses  of  departmental  employees  should  be  charged  to  the  ap- 
propriate departmental  accounts. 


112  OPERATING  EXPENSE  ACCOUNTS 

B  A  781 .  22  General  Stationery  and  Printing-. 

This  account  shall  include  the  cost  of  stationery,  stationery  supplies 
and  postage  not  elsewhere  provided  for. 

Note  A. — The  cost  of  printing  briefs  and  other  legal  papers  should  be  charged 
to  account  No.  781.26,  "Law  Expenses." 

Note  B. — The  cost  of  printing  signs,  posters  and  other  advertising  matter 
should  be  charged  to  account  No.  771.23,  "Advertising  Supplies  and  Expenses." 

Note  C. — The  cost  of  such  mechanical  calculators,  typewriters,  duplicating 
machines,  and  other  office  appliances  as  are  not  properly  capitalized,  should,  if 
for  use  in  general  office,  be  charged  to  account  No.  781.21,  "General  Office  Sup- 
plies and  Expenses,"  or,  if  for  the  use  of  department  offices,  to  the  proper 
departmental  accounts. 

B  A  781 .  23         Maintenance  of  General  Structures. 

This  account  shall  include  the  cost  of  maintaining  general  office 
buildings  or  other  structures  used  for  general  purposes.  This  covers 
maintenance  of  walks,  driveways,  and  grounds  connected  therewith, 
and  all  incidental  expenses  connected  with  the  maintenance  of  such 
buildings  or  structures. 

B  A  781 .  24  Operation  of  Communication  System. 

This  account  shall  include  the  pay  and  expenses  of  superintendent 
and  assistants,  and  of  clerks,  patrolmen,  testers  and  inspectors,  the 
cost  of  all  supplies  for  and  other  expenses  incurred  in  connection  with 
the  operation  of  the  accounting  company's  communication  system. 
This  will  include  salaries  and  wages  of  employees  at  the  main  ex- 
change, also  the  salaries  and  wages  of  employees  in  general  offices 
operating  switchboards  on  main  line  telephone  systems  not  owned 
by  the  accounting  company. 

Note. — Salaries  and  wages  of  telephone  and  telegraph  operators  in  power 
plants,  sub-stations,  stores,  commercial  offices  and  at  other  points  in  the  account- 
ing company's  system  shall  be  charged  to  the  appropriate  operating  account  at 
the  location  involved  and  not  to  this  account. 

B  A  781 .  25  Maintenance  of  Communication  System. 

This  account  shall  include  the  cost  of  maintaining  all  telephone, 
telegraph  and  wireless  buildings  and  other  structures  and  equipment, 
the  investment  in  which  is  carried  in  or  classified  under  fixed  capital 
accounts  Nos.  312g-4,  "Communication  System  Structures,"  and  344e, 
"Telephone,  Telegraph  and  Wireless  System." 

Note. — Include  in  this  account  only  such  charges  in  connection  with  hydro- 
electric production  as  are  not  included  in  account  No.  708.26,  "  Maintenance  of 
Telephone  System." 

B  A  781 .  26         Law  Expenses. 

This  account  shall  include  all  law  expenses  such  as  salaries  and 
expenses  of  counsel,  solicitors  and  attorneys,  their  clerks  and  attendants 


OPERATING  EXPENSE  ACCOUNTS  113 

and  expenses  of  their  offices ;  cost  of  law  books,  printing  briefs,  legal 
forms,  testimony,  re^x^rts,  etc. ;  fees  and  retainers  for  services  of 
attorneys  not  regular  employees ;  court  costs  and  payments  of  special 
notarial  and  witness  fees  not  provided  for  elsewhere,  expenses  con- 
nected with  taking  depositions  and  all  law  and  court  expenses  not  pro- 
vided for  elsewhere. 

B  A  781.27         Insurance. 

This  account  shall  include  premiums  paid  for  fire,  fidelity,  boiler, 
casualty,  burglary,  lightning,  and  all  other  insurance ;  also  charges  by 
which  self -insurance  is  provided. 

This  account  shall  be  credited  with  dividends  paid  or  surplus  returned 
to  the  accounting  company  in  any  other  form  by  mutual  insurance 
companies. 

Note. — That  portion  of  the  premium  for  liabiHty  insurance  based  on  the  pay- 
roll expended  on  construction  accounts  may  be  charged  to  the  construction 
accounts  affected. 

B  A  781 .  28  Store  Expenses. 

This  account  shall  include  all  salaries  and  expenses  in  connection 
with  storerooms.  This  covers  the  cost  of  sending  materials  and  sup- 
plies from  general  storerooms  to  branch  storerooms  and  the  collection 
of  scrap  material. 

To  this  account  shall  be  credited  all  discounts  recovered  through  the 
prompt  payment  of  bills  for  materials  and  supplies  consumed  in  opera- 
tion, unless  such  discounts  are  applied  to  the  particular  bills. 

Note. — Expenses  charged  to  this  account  may  be  distribufed  over  materials 
passed  through  the  stores  department  on  the  basis  of  a  percentage  of  invoice  cost 
of  such  materials,  or  other  bases  deemed  appropriate  by  the  management  of  the 
accounting  company.  Amounts  so  distributed  should  be  credited  to  this  account 
and  charged  to  the  accounts  to  which  the  cost  of  such  materials  is  charged  as 
they  are  issued  or  used.  Credits  should  be  made  in  such  detail  as  to  permit  the 
accounting  company  to  analyze  them. 

B  A  781 .  29  Transportation  Expenses. 

This  account  shall  include  the  cost  of  feed,  keep  and  shoeing  of 
horses,  wages  of  stablemen,  hostlers,  veterinary  expenses,  and  all  other 
expenses  of  stabling  horses ;  also  wages  of  garage  men,  cost  of  gasoline, 
lubricants,  and  other  garage  supplies,  and  the  cost  of  repairing  harness 
and  vehicles. 

Note  A. — The  cost  of  horses  purchased  to  replace  others  should  be  charged 
to  account  No.  344,  "  General  Equipment." 

Note  B. — Charges  to  this  account  may  be  distributed  to  the  work  done  by  the 
stable  and  garage  equipment  on  the  basis  of  hourly  rates,  rates  per  ton  per  mile 
hauled,  or  other  bases  deemed  appropriate  by  the  management  of  the  accounting 
company.    Amounts  so  distributed  should  be  credited  to  this  account  and  charged 


114  OPERATING  EXPENSE  ACCOUNTS 

to  the  account  representing  the  construction  or  operation  benefited.  Credits 
should  be  made  in  such  detail  as  to  permit  the  accounting  company  to  analyze 
them. 

B  A  781 .  30  Undistributed  Adjustments. 

At  least  once  a  year  an  inventory  of  materials  and  supplies  should  be 
taken  and  the  difference  in  respect  of  any  particular  class  of  materials 
and  supplies  between  the  ledger  and  inventory  balances  should  be 
debited  or  credited  to  this  account  in  case  it  cannot  be  assigned  to  a 
specific  account. 

This  account  shall  also  be  charged  or  credited  with  miscellaneous 
minor  operating  items  of  such  a  nature  that  an  exact  distribution  among 
the  accounts  to  which  they  are  applicable  cannot  be  determined.  This 
covers  such  transactions  as  receipts  from  sale  of  junk. 

Note. — Where  materials  and  supplies  have  been  used  in  construction  as  well 
as  in  operation  a  suitable  proportion  of  the  shortages  or  overages  disclosed  by 
the  inventory  may  be  debited  or  credited  to  account  No.  356,  "  Miscellaneous 
Construction  Expenditures." 

B  A  781.31  Rentals. 

Charge  to  this  account  all  rentals  paid  and  expenses   incurred   for 

buildings  or  space  used  for  the  purposes  of  the  business,  unless  the 

premises  are  used  solely   for  construction  purposes  or  in   connection 

with  a  clearing  or  apportionment  account,  in  which  latter  events  the 

rentals  should  be  charged  accordingly. 

Note. — If  the  accounting  company  so  desires,  these  rentals  may  be  charged 
to  the  departmental  account  interested,  such  as  production,  transmission,  distribu- 
tion, commercial,  nev^  business,  or  miscellaneous  general  expenses. 

B  A  781 .32         Other  Miscellaneous  General  Expenses. 

This  account  shall  include  the  cost  of  publishing  and  distributing 
annual  reports  to  stockholders,  advertising  notices  of  stockholders' 
meetings,  dividend  notices  and  other  corporate  and  financial  notices  of 
a  general  character,  association  dues,  contributions  for  conventions  and 
meetings  of  the  industry,  cost  of  experimental  work  conducted  for  the 
benefit  of  the  industry  or  the  improvement  of  service,  traveling  and 
incidental  expenses  of  general  officers  and  other  general  office  em- 
ployees, fees  of  transfer  agents,  registrars  of  stock,  and  fiscal  agents, 
directors'  fees,  compensation  to  management  corporations,  and  other 
miscellaneous  expenses  connected  with  the  general  management  not 
otherwise  provided  for. 

D  C  B  A  782        Retirement  Expense. 

This  account  shall  include  such  amounts,  in  addition  to  appropria- 
tions from  surplus  to  retirement  reserve,  as  the  accounting  company 


OPEKATING  EXPENSE  ACCOUNTS  115 

may  determine  to  be  necessary  to  provide  a  reserve  against  which  may 
be  charged  the  original  cost  of  all  property  retired  from  service  plus  the 
cost  of  dismantHng,  less  salvage.  The  amounts  charged  to  this  account, 
or  appropriated  from  surplus,  and  credited  to  the  "Retirement  Reserve" 
shall  be  in  addition  to  the  necessary  costs  of  keeping  the  plant  and 
equipment  in  a  high  state  of  efficiency  through  charges  to  the  regular 
maintenance  accounts. 

Note. — It  is  the  intent  of  the  classification  that  a  reserve  shall  be  provided, 
either  through  retirement  expense  or  by  appropriations  from  surplus  or  both, 
sufficient  to  cover  all  retirement  losses  that  may  reasonably  be  expected. 

D  C  B     783        Injuries  and  Damag^es. 

A  783 . 1        Claim  Department  Expenses. 

This  account  shall  include  salaries  and  expenses  of  claim  agents, 
investigators,  adjusters,  and  others  engaged  in  the  investigation  of 
accidents  and  adjustment  of  claims. 

A 783.2        Medical  Expenses. 

This  account  shall  include  salaries,  fees,  and  expenses  of  surgeons 
and  doctors,  hospital  attendants,  nursing,  medical  and  surgical  supplies, 
fees  and  expenses  of  coroners  and  undertakers;  and  contributions  to 
hospitals. 

A 783.3        Injuries  to  Employees. 

This  account  shall  include  amounts  paid  in  settlement  of  claims  of 
employees  for  injuries  arising  in  their  employment;  also  wages  paid  to 
disabled  employees  while  ofif  duty. 

A  783 . 4        Other  Personal  Injuries  and  Property  Dam- 
age. 

This  account  shall  include  amounts  paid  in  settlement  of  claims  of 
persons  other  than  employees  for  personal  injuries  sustained  in  connec- 
tion with  the  operation  of  the  plant  and  amounts  paid  in  settlement  of 
claims  for  damage  to  property  not  owned  by  the  accounting  company. 

A  783 . 5        Miscellaneous  Accident  Expenses. 

This  account  shall  include  all  expenses  in  connection  with  accidents 
and  damages  not  provided  for  in  the  foregoing  accounts. 

Note. — If  it  so  desires,  the  accounting  company  may  charge  each  month  to 
"Injuries  and  Damages"  (or  to  the  appropriate  sub-accounts)  and  credit  to 
account  No.  252.  "  Casualty  and  Insurance  Reserve,"  a  proportion  of  the  total 
amount  estimated  to  be  necessary  to  expend  during  the  year  for  injury  and  dam- 
age claims,  and  the  actual  disbursements  above  designated  shall  then  be  charged 
against  said  reserve  account.  The  charges  to  this  account  shall  be  adjusted  at  the 
close  of  the  fiscal  year  to  actual  expenses  unless  a  balance  remains  representing 
liability  for  unsettled  claims. 


116  OPERATING  EXPENSE  ACCOUNTS 

D  C  B  A  784        Regulatory  Commission  Expenses. 

This  account  shall  include  the  expenses  incurred  hy  the  accounting 
company  in  its  transactions  with  governmental  regulative  commissions. 
This  covers  fees  and  retainers  and  expenses  of  counsel,  solicitors, 
attorneys,  clerks,  attendants,  witnesses,  and  others  whose  services  are 
secured  especially  for  the  defense  or  prosecution  of  those  petitions 
presented  to  a  regulatory  commission  that  afifect  the  accounting  com- 
pany; the  pay,  traveling,  and  other  expenses  of  those  specially  em- 
ployed or  assigned  to  ascertain  the  value  of  property  owned  or  used  by 
the  accounting  company ;  the  cost  of  stationery  and  printing  and  engi- 
neering supplies  consumed ;  and  other  necessary  expenses  of  a  similar 
character. 

This  account  does  not  include  expenses  for  improvement  of  service, 
for  additional  inspection,  etc.,  which  are  made  necessary  by  the  rules, 
regulations,  or  orders  of  a  regulatory  commission.  Such  expenses 
should  be  charged  to  the  appropriate  specific  operating  expense  account. 

Note. — Expenses  incident  to  the  sale  or  issue  of  securities  should  not  be 
charged  to  this  account  but  to  the  appropriate  discount  account.  (See  "  Balance 
Sheet  Accounts — General  Instructions  and  Definitions,"  Section  12,  page  7.) 

D  C  B     785        Relief  and  Welfare  Work. 

A  785.1        Employees'  Welfare  Department. 

This  account  shall  include  all  salaries  and  expenses  incurred  in  con- 
ducting accident  prevention,  relief,  and  welfare  departments;  also 
contributions  made  to  such  departments. 

A  785.2        Pensions. 

This  account  shall  include  all  pensions  paid  to  retired  employees  and 
all  expenses  in  connection  therewith. 

D  C  B  A  786        Franchise  Requirements. 

This  account  shall  include  the  value  at  the  normal  selling  price  of 
all  current  and  materials  and  supplies  furnished  municipal  corixjra- 
tions  in  compliance  with  franchise  requirements  and  for  which  no  pay- 
ment is  received  by  the  accounting  company ;  also  all  direct  exi>enses 
incurred  in  compliance  with  such  requirements  for  which  no  reim- 
bursement is  received  by  the  accounting  company. 

Amounts  charged  to  this  account  for  which  there  is  no  direct  money 
outlay  shall  be  credited  to  account  No.  790,  "Duplicate  Miscellaneous 
Charges — Cr," 

D  C  B  A  787        Amortization  of  Franchises. 

This  account  shall  include   for  each  accounting  period  the  amount 


OPERATING  EXPENSE  ACCOUNTS  117 

charged  to  distribute  the  cost  of  limited  franchises  equitably  over  their 
lives.  Amounts  charged  to  this  account  shall  be  concurrently  credited 
to  fixed  capital  account  No.  302,  "Franchises." 

DCBA788        Electric  Expenses  Transferred— Cr. 

This  account  shall  include  such  part  of  the  operating  costs  (other 
than  production  expenses,  for  which  see  Production  Account  No.  715, 
"Production  Expenses  Transferred — Cr.")  borne  in  the  first  instance 
by  the  accounting  company's  electric  department  as  are  properlv 
chargeable  to  another  coordinate  department,  such  as  an  electric  rail- 
way or  gas  department. 

This  is  not  intended  to  prohibit  the  apportioning  of  primary  accounts 
between  departments,  and  so  far  as  practicable  departmental  costs 
should  be  determined  in  that  way.  There  may,  however,  be  cases 
where  it  is  desirable  to  assign  to  other  operations  a  flat  percentage  of 
total  electric  operating  expenses  or  of  some  group  of  electric  operating 
expenses  or  some  similar  arbitrary  amount,  and  in  such  cases  the 
credit  should  be  made  to  this  account. 

D  C  B  A  789        Joint  Operating  Expenses — Cr. 

When  any  plant  or  equipment  is  maintained  or  operated  by  the 
accounting  company  for  the  joint  benefit  of  itself  and  others  under  an 
arrangement  for  apportioning  the  operating  expenses,  the  portion  of 
such  expenses  chargeable  to  others  under  the  arrangement  may  be 
credited  to  this  account  if  it  is  based  on  a  percentage  of  the  total 
operating  expenses  or  a  percentage  of  the  total  of  some  group  of 
primary  operating  expense  accounts  or  determined  in  some  similar 
fashion.  So  far  as  practicable,  joint  operating  costs  should  be  appor- 
tioned by  primary  accounts  and  that  part  of  such  cost  borne  in  the 
first  instance  by  the  accounting  company,  but  chargeable  to  the  other 
party  or  parties  to  the  joint  agreement,  should  be  credited  directly  to 
the  primary  accounts  involved. 

D  C  B  A  790        Duplicate  Miscellaneous  Charges — Cr. 

This  account  shall  include  the  concurrent  credits  for  all  charges 
which  may  be  made  to  any  operating  expense  account,  except  as  pro- 
vided for  in  account  No.  714,  "Duplicate  Production  Charges — Cr.," 
in  respect  of  the  consumption  of  electric  energy  produced  or  purchased 
primarily  for  resale  by  the  accounting  company ;  also  all  similar  charges 
in  respect  of  any  services  rendered  for  which  there  is  no  direct  money 
outlay.     This  covers  such  items  as  current  supplied  to  a  municipality 


118  OPERATING  EXPENSE  ACCOUNTS 

without  charge  in  accordance  with  franchise  requirements ;  current 
furnished  to  employees  in  lieu  of  wages;  housing  of  employees  as  part 
comi^ensation  for  their  services,  etc. 

This  account  is  optional  to  the  extent  that  charges  of  the  sort  de- 
scribed, not  involving  any  direct  money  outlay,  are  not  required  to  he 
made.  If  the  accounting  company  desires  to  make  such  charges,  how- 
ever, the  concurrent  credit  must  be  to  this  account. 


Uniform  Classification  of  Accounts  for  Electrical  Utilities. 
(Paper,  $1.00  per  copy,  plus  postage) 

Uniform  Classification  of  Accounts  for  Gas  Utilities. 
(Paper,  $1.00  per  copy,  plus  postage) 

Uniform  Classification  of  Accounts  for  Water  Utilities. 
(Paper,  $1.00  per  copy,  plus  postage) 
(Recommended   by   the    National   Association   of   Railway   and 
Utilities  Commissioners  for  adoption  by  State  Commissions.) 


1932  Convention  Proceedings  of  the  N.  A.  R.  U.  C. 

(Cloth,  $5.00  per  copy,  plus  postage) 

1933  Convention  Proceedings  of  the  N.  A.  R.  U.  C. 

(Cloth,  $6.00  per  copy,  plus  postage) 


published  by 

THE  STATE  LAW  REPORTING  COMPANY 

30  Vesey  Street 

New  York  City 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 

Los  Angeles 

This  book  is  DUE  on  the  last  date  stamped  below. 


FormL9-10m-3,'48(A7920)444 


THE  LIBHAMY 

UNiVERSn  Y  OF  CAUfCMSUk 
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